Posco has eye on supply with Argentina lithium plant

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Posco has eye on supply with Argentina lithium plant

Published: 31 Oct. 2024, 11:18

Posco Group associates and Argentinian officials pose for a photo at a ceremony held to mark the completion of POSCO Holdings' lithium hydroxide plant in Güemes City, Salta Province of Argentina, on Oct. 24. [POSCO HOLDINGS]

Posco Holdings became the first Korean company to establish a lithium hydroxide factory at a foreign salt lake as part of efforts to stabilize its supply chain of the compound for secondary batteries.

The company held an opening ceremony on Oct. 24 at its 25,000-ton lithium hydroxide factory in Güemes, Argentina, the first in its 3-phase project, using its own lithium extraction method on saltwater from the lake.

Attendees of the event included Vice President of Posco Holdings’ secondary battery materials division, Kim Jun-hyung, Head of Investment Engineering Hwang Chang-hwan and President of Posco Argentina Kim Kwang-bok, as well as Salta Province Governor Gustavo Saenz, Catamarca Governor Raul Jalil, Jujuy Governor Carlos Sadir, Argentine Mining Undersecretary Luis Lucero and Korean Ambassador to Argentina Lee Yong-soo.

Lithium hydroxide is a key ingredient in anodes — a crucial part of secondary batteries such as those used in EVs — and is the start of Posco's secondary battery business value chain composed of lithium, anodes and recycling that offers a competitive advantage.

The group plans to utilize its shares and rights in foreign salt lakes and mines to produce lithium hydroxide for a stable supply while boosting its status as a global supplier amid increasing demand for secondary battery materials in a landscape reshaped by the U.S. Inflation Reduction Act.

This most recent factory brings the company's total production volume of lithium hydroxide to 46,500 tons, with 21,500 tons produced at Posco-Pilbara Lithium Solution's plant at the Yulchon industrial complex in Gwangyang.

Since acquiring mining rights at the Hombre Muerto lake in 2018, the group has steadily increase its investments, establishing local subsidiary Posco Argentina.

A post-acquisition analysis confirmed 13.5 million tons of lithium carbonate in the lake. Posco proceeded to invest $830 million to construct the Saltwater Lithium Step One plant, which applies its proprietary lithium extraction technology that enables the cost-saving recovery and reuse of raw materials.

With an annual production capacity equivalent to 600,000 EVs, the plant is Argentina's first commercial lithium hydroxide plant. The construction process created 4,800 jobs with 60 local cooperatives.

Posco is investing around $1 billion to build another 25,000-ton plant, slated for completion in the second half of next year. The company plans for a third plant to bring the total brine-based lithium production capacity to 100,000 tons per year, while eying a total production volume of mineral lithium-based lithium hydroxide of 43,000 tons annually.

Posco is determined to push ahead with its investments despite a slowdown in the EV market. To maintain competitiveness, the group is reviewing participation in other salt lake projects in South America, and continues to actively invest in related corporations in North America and Australia as it seeks to fortify its supply chain.

BY KIM YEONSOO [[email protected]]

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