POSCO Accelerates Commercialization of Lithium Project Based on Argentine Salt Lake

Annual production scale of 25,000 tons, equivalent to 600,000 electric vehicles

Targeting 220,000 tons of lithium production annually by 2030

Only domestic system capable of producing lithium from brine, ore, and used batteries

[Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik] POSCO Group is accelerating the commercialization 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 10th, POSCO reported to and received approval from the board of directors for 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 USD (about 950 billion KRW), and POSCO plans to increase capital in POSCO Argentina. The production plant, with an annual capacity of 25,000 tons, is scheduled to begin construction in Argentina in the first half of next year, aiming for completion in the first half of 2024. Additionally, a second-phase expansion investment to add another 25,000 tons of lithium production capacity is under consideration.

POSCO's main product, lithium hydroxide, is favored over lithium carbonate for electric vehicle batteries due to its advantage in improving driving range, leading to increased demand recently. The 25,000 tons of lithium hydroxide can be used for 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 from both brine and ore. POSCO's lithium brine production technology uses less brine and freshwater compared to other technologies, recycles most auxiliary materials during the process, and achieves high productivity.

Anticipating a global lithium supply shortage, POSCO proactively began preparations 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. POSCO has also successfully operated a demonstration plant near the local salt lake for over a year, accumulating know-how for lithium production and training specialized personnel, completing preparations for commercial production.

Thus, POSCO has established a foundation to become the only domestic "all-round lithium production player" capable of extracting lithium from brine, ore, and spent batteries and conducting commercial production independently.

Besides the Argentine salt lake, POSCO secured a stable supply system for lithium ore through equity investment in Australian mining company Pilbara Minerals in 2018. After launching the business corporation POSCO Lithium Solutions in May this year, POSCO began construction of a lithium hydroxide production plant based on ore with an annual capacity of 43,000 tons in Gwangyang, aiming for completion in the second half of 2023.

Additionally, POSCO established POSCO HY Clean Metal in a joint venture with China's Huayou Cobalt and is constructing a recycling plant in the Yulchon Industrial Complex, Jeollanam-do, to extract key secondary battery materials such as lithium from spent batteries. The plant is scheduled for completion in the second half of 2022 and will enter commercial operation thereafter.

Meanwhile, 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; the actual transaction price of lithium carbonate for batteries in China is about 35,000 USD per ton, more than five times higher than last year, and the upward trend is expected to continue beyond 2022.

To respond to this rapidly growing market, POSCO plans to build an annual lithium production capacity of 110,000 tons by 2025 and 220,000 tons by 2030 under the newly launched holding company system, based on ore, brine, and spent batteries, contributing to domestic lithium supply.

Furthermore, led by the holding company, POSCO is establishing a strategy to preoccupy the next-generation solid-state battery market and plans to expand its secondary battery materials business by building a demonstration plant in partnership with a company possessing solid electrolyte production technology, a key material for solid-state batteries.

Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik hss79@asiae.co.kr

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