Skip to content
  • KOSPI 3177.52 +5.86 +0.18%
  • KOSDAQ 1025.71 +3.49 +0.34%
  • KOSPI200 427.37 +0.62 +0.15%
  • USD/KRW 1117.4 4.00 0.36%
  • JPY100/KRW 1,034.44 4.32 0.42%
  • EUR/KRW 1,344.96 5.32 0.40%
  • CNH/KRW 171.95 0.61 0.35%
View Market Snapshot

EV battery materials

POSCO's lithium reserves in Argentina soar to $31 bn

Mar 04, 2021 (Gmt+09:00)

Construction site of a demonstration plant for lithium extraction — Hombre Muerto Salt Lake, Argentina (Courtesy of POSCO)
Construction site of a demonstration plant for lithium extraction — Hombre Muerto Salt Lake, Argentina (Courtesy of POSCO)

The value of lithium reserves at a salt lake in Argentina, which South Korean steelmaker POSCO acquired for $280 million in 2018, is estimated to have more than doubled to 35 trillion won ($31 billion) at the current market price, in addition to its far larger-than-expected amount of reserves.

Late last year, the world’s fifth-largest steelmaker confirmed the lithium reserves at the Hombre Muerto Salt Lake in northwest Argentina to be 13.5 million tons, six times more than its earlier projection of 2.2 million tons. The current level of 13.5 million tons is enough to produce lithium-ion batteries for around 370 million electric vehicles.

POSCO purchased the 17,500-hectare lake, which it calls the core of POSCO Group's new growth engine, from Galaxy Resources Ltd., an Argentine lithium company. Lithium is used to make two key components of EV batteries, the cathode and the electrolyte.

Additionally, POSCO said last year its study found the Argentine lithium mine could produce 25,000 tons of the material annually for the next 50 years, much longer than its original expectation of 20 years.

Prices of lithium carbonate, or lithium salt, have spiked to $11,000 per ton in China’s spot market as of February, versus $5,000 in July 2020. 

“As the EV market is growing around the world including China, prices of lithium, a key EV battery material, will likely continue their upward trend,” said a POSCO official.

To boost its much-needed lithium supply, in 2018 POSCO signed a long-term contract with emerging lithium producer Pilbara Minerals in Australia to purchase lithium concentrate. Annual production capacity from the contract is projected at 40,000 tons, according to POSCO.

(Courtesy of POSCO)
(Courtesy of POSCO)


NICKEL, GRAPHITE

POSCO is also seeking to broaden its nickel and graphite supply sources, while recycling used batteries. Nickel is an essential cathode material for EV batteries, while graphite is used to make the anode, another key EV battery component.

POSCO Chemical plans to boost its cathode production capacity to 120,000 tons by 2023 and 400,000 tons by 2030, in line with the steelmaker's goal of becoming the world’s top player in the global EV battery materials market by 2030.

To diversify from China for graphite supply, POSCO bought a 15% stake in Australia-based Black Rock Mining Ltd., which owns the Mahenge graphite mine in Tanzania, Africa, for $7.5 million earlier this year. Through the deal, POSCO will gain permanent purchasing rights for graphite produced from the Mahenge mine.

The surging value in the lithium reserves pushed the share prices of POSCO and its affiliates higher. POSCO rose 3.01% to 308,000 won around midday Thursday, after jumping nearly 5% on Wednesday.

Shares of Posco M-Tech Co., a steel raw materials producer, surged by their daily limit of 30% to 8,720 won, marking their highest level in more than two years. POSCO ICT jumped 10.73% to 8,360 won, while POSCO Coated & Color Steel advanced 3.49% to 31,150 won.

Write to Man-Su Choe at bebop@hankyung.com

Yeonhee Kim edited this article.

Comment 0

0/300