POSCO Secures Supply Chain for Electric Vehicle Battery Material 'Lithium'

Board Approval for Investment in Argentina Lithium Hydroxide Plant
Construction of 25,000t Annual Capacity Plant to Begin Next Year... Phase 2 Expansion Under Review
Targeting 220,000t Lithium Production by 2030
Only Domestic System Capable of Producing Lithium from Brine, Ore, and Spent Batteries

POSCO's lithium production demo plant and brine storage facility in Argentina (Photo by POSCO)

[Asia Economy Reporter Hwang Yoon-joo] POSCO Group is accelerating its commercialization project of lithium hydroxide based on the Argentine salt lake. This is the first step toward achieving the 2030 mid-to-long-term vision for the lithium business following POSCO Group's declaration of transition to a holding company system.

On the 16th, POSCO announced that its board of directors approved an investment project to commercialize lithium hydroxide production using lithium brine from the Hombre Muerto salt lake in Argentina.

The total investment cost, including infrastructure investment and working capital, is approximately $830 million (about 950 billion KRW), and POSCO plans to increase capital in POSCO Argentina. The production plant, with an annual capacity of 25,000 tons, will begin construction in Argentina in the first half of next year and is scheduled to be completed in the first half of 2024. Additionally, a second-phase expansion investment to add another 25,000 tons of lithium production capacity is also under consideration.

POSCO's main focus, lithium hydroxide, has recently seen increased demand as it is advantageous for improving the driving range of electric vehicle batteries compared to lithium carbonate. The 25,000 tons of lithium hydroxide production capacity corresponds to the amount used in approximately 600,000 electric vehicles.

The raw materials for lithium hydroxide can be divided into lithium brine dissolved in water, like the Argentine salt lakes, and lithium ore extracted from mines. Since starting lithium production technology development in 2010, POSCO has developed environmentally friendly lithium extraction technologies for both brine and ore. POSCO's lithium brine production technology uses less brine and freshwater compared to other technologies, recycles most of the by-products during the process, and also achieves high productivity.

Global market research firms such as JP Morgan and Roskill forecast that due to the rapid growth of the global electric vehicle market, a significant lithium supply shortage will occur worldwide starting in 2024. The selling price has also surged, with the actual transaction price of lithium carbonate for batteries in China currently around $35,000 per ton, more than five times higher than last year. The industry expects this upward trend to continue beyond 2022.

POSCO proactively began preparing for commercial production based on the Argentine salt lake it acquired in 2018. Last year, additional exploration of the salt lake confirmed lithium reserves of 13.5 million tons, six times more than at the time of acquisition. Furthermore, by successfully operating a demonstration plant near the local salt lake for over a year, POSCO accumulated know-how for lithium production and completed preparations for commercial production.

With this, POSCO has established a foundation to become the only 'all-round lithium production player' in Korea capable of extracting lithium from brine, ore, and spent batteries and conducting commercial production independently.

Under the newly planned holding company system, POSCO aims to build an annual lithium production capacity of 110,000 tons by 2025 and 220,000 tons by 2030 based on ore, brine, and spent batteries, contributing to domestic lithium supply and demand. Additionally, POSCO plans to expand its secondary battery materials business by establishing strategies to lead the next-generation solid-state battery market, including forming joint ventures with companies possessing solid electrolyte production technology, and building demonstration plants for solid-state battery materials.

This content was produced with the assistance of AI translation services.