POSCO to spend $830 mn to build lithium plant in Argentina

South Korea's POSCO Group has earmarked $830 million for spending on a new plant in Argentina to extract lithium hydroxide, a material for electric vehicle batteries, from a salt lake.

The plant will be built near the salt lake of Salar del Hombre Muerto in northwest Argentina, which the world's fifth-largest steelmaker acquired for $280 million in 2018.

POSCO said on Dec. 16 that its board of directors approved of the spending plan, which marked its first massive investment since its announcement last week to transition to a holding company structure.

The construction will begin next year. The plant will come online in 2024 to extract 25,000 tons of lithium hydroxide from the salt lake annually, enough for 600,000 EVs. It plans to double the capacity in the following years.

The spending plan includes the construction cost and initial operating expenses.

Since acquiring the salt lake, POSCO has operated a demonstration plant near the site for more than a year. The 17,500-hectare lake has 13.5 million tons of lithium reserves, which the steel giant said in March has lithium reserves estimated at 35 trillion won.

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.
 
Lithium hydroxide is extracted from saltwater or ores and used along with high-nickel cathode material for EV batteries. A battery cell high in nickel content offers longer mileage and shorter charging time than existing batteries. 

If the lithium extraction plant starts operation, POSCO will become the only company in South Korea to produce lithium from saltwater, ores and used batteries.

In 2018, POSCO invested in Pilbara Minerals, an Australian lithium mining company, to secure 320,000 tons of lithium extracted from ores per year.

At home, POSCO Lithium Solution Co. will build a plant in 2023 to extract lithium hydroxide from ores in Gwangyang, South Korea. POSCO is also building a recycling plant in the country in cooperation with Zhejiang Huayou Cobalt to produce lithium from used batteries. 

Through the series of investments, POSCO will have 110,000 tons of lithium production capacity by 2025 and then 220,000 tons by 2030.

Simultaneously, the company is preparing to manufacture solid electrolytes, used in all-solid-state batteries, dubbed a next-generation EV battery.

"We will expand our business portfolio not only to lithium-ion batteries but also to all-solid-state batteries," said a POSCO official. "Our goal is to become one of the world's top lithium suppliers by 2030."

Write to Jung-hwan Hwang at jung@hankyung.com
Yeonhee Kim edited this article.