Posco expands its plants to make lithium for EV batteries

Posco Holdings' demo plant manufacturing lithium hydroxide near the Hombre Muerto salt lake in Argentina. [POSCO HOLDINGS]

Posco Holdings will invest $1.093 billion in two lithium factories to stabilize its supply of the mineral amid growing demand for electric vehicles (EVs).

The company will invest $741 million in a lithium carbonate factory near the Salar del Hombre Muerto salt lake in northern Argentina, and $352 million to build a lithium hydroxide plant in Korea.

The lithium carbonate produced in the Argentina plant will be shipped to the plant in Korea to make lithium hydroxide. Lithium hydroxide is one of the core materials to make cathodes, which account for 40 percent of the production cost of an EV battery.

Groundbreaking on the lithium carbonate factory will come within the year, while the construction of the lithium hydroxide plant will start in the first half of next year.

The Korea plant will have an annual capacity of 25,000 tons, which is enough for batteries for 600,000 EVs. The lithium hydroxide will be supplied to local cathode manufacturers including Posco Chemical.

Posco Holdings is already building an 830-million-won ($580,000) lithium hydroxide factory in Argentina. That plant will have 25,000 tons of capacity and construction will be completed in the first half of 2024.

In 2018, Posco acquired mining rights of the Hombre Muerto salt lake from Applecross, Australia-based Galaxy Resources for $280 million. It discovered last year that the lake has 13.5 million tons of lithium reserves, or six times the amount it was projected to have in 2018.

Posco has been operating a small demo plant near the lake, extracting lithium and testing commercial viability.

Posco Holdings aims to expand its lithium production capacity to 300,000 tons by 2030.

BY SARAH CHEA [chea.sarah@joongang.co.kr]