POSCO, Hancock seek to jointly build lithium plant

POSCO Holdings Inc. on Tuesday signed a memorandum of understanding with Hancock Prospecting, an Australian mining company, to build a plant to annually produce 30,000 tons of lithium, a key electric vehicle battery material.

The two companies will look for candidate sites for the factory and finalize details such as investment amount in the facility construction later, POSCO said in a press release.

With the preliminary agreement signed online, they are set to expand their partnership beyond iron ore and natural gas production.

POSCO is striving to strengthen its EV battery materials supply chain ranging from lithium mining and salt lake lithium extraction to cathode materials and recycling, leveraging Hancock’s various mining resources.

It also wants to take advantage of the slowdown in global EV demand to secure EV battery resources.

In 2010, the steel giant bought a 12.5% stake in Hancock’s iron ore mine Roy Hill. In 2020, the two companies jointly acquired Senex Energy, an Australian natural gas supplier.

In 2018, it acquired the Hombre Muerto salt lake in northwest Argentina.

This year, POSCO completed a factory to produce salt lake lithium and another for lithium mining in Argentina with an annual capacity of 25,000 tons and 43,000 tons, respectively. This is enough to churn out about 1.6 million EVs.

Their partnership is expected to shield their customers, notably EV battery makers, from US Inflation Reduction Act regulations.  

Under the Act signed into law in 2022, the US will grant subsidies only for EVs assembled, or with a certain portion of their components produced, in the US or a free trade partner.

Write to Yeonhee Kim at yhkim@hankyung.com

Jennifer Nicholson-Breen edited this article.