Posco Future M inks deal for 20,000 tons of lithium hydroxide

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Posco Future M inks deal for 20,000 tons of lithium hydroxide

Published: 06 Dec. 2024, 17:59

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

A worker in Posco Future M's cathode materials plant in Gwangyang, South Jeolla [POSCO FUTURE M]

Posco Future M inked a deal with Posco-Pilbara Lithium Solution, a joint venture between Australia-based Pilbara Minerals and steelmaker Posco, to source 20,000 tons of lithium hydroxide in a bid to reduce reliance on China for raw materials to qualify for U.S. government incentives.

Under the deal announced on Friday, Posco Future M will source around 20,000 tons of the ingredient critical in making cathodes materials. That's enough to make batteries to power some 460,000 EVs.

The joint venture, established in 2021, imports raw lithium material from Pilbara Minerals in Australia and processes it into lithium hydroxide domestically. It runs two plants in South Jeolla with a total production capacity reaching 43,000 tons.

It's an attempt to "secure a stable supply chain of raw materials" as the United States announced a restriction on the use of raw materials from foreign entities of concern such as China, Russia, North Korea and Iran starting in 2025 to qualify for up to $7,500 tax incentives to EV buyers.

Currently, Korea relies heavily on China for lithium hydroxide, with such imports coming in at some 80 percent of the total inbound shipments as of last year.

"We will gradually expand our orders with Posco-Pilbara Lithium Solution as sales to the United States are expected to grow in the near years," said a spokesperson for Posco Future M.

BY SARAH CHEA [[email protected]]