POSCO Group has embarked on an investment totaling KRW 1 trillion to secure lithium resources in Australia and Argentina. This move is interpreted as a strategy to significantly enhance cost competitiveness by securing high-quality resources amid signs of a rebound in lithium prices, which had been in a prolonged decline due to the slowdown in the electric vehicle market.

According to POSCO Group on the 12th, POSCO Holdings decided on the 11th to acquire a 30% stake in a new lithium holding company established by Australian mining company Mineral Resources for USD 765 million (approximately KRW 1.1215 trillion). With this investment, POSCO Holdings will secure the right (offtake) to purchase 270,000 tons of lithium concentrate annually from the 'Wodgina' and 'Mount Marion' mines, which are among the world's top lithium mines located in Western Australia. This quantity is sufficient to produce 37,000 tons of lithium hydroxide, which can be used to manufacture batteries for 860,000 electric vehicles. As a shareholder, POSCO Holdings plans to participate in mine management, earn dividend profits, and is also considering expanding into the smelting business when the market recovers.

In addition to Australia, POSCO Holdings is accelerating its efforts to secure lithium in Argentina and has also announced an investment plan to acquire lithium from Argentine salt lakes. On the 5th, POSCO Holdings decided to invest USD 65 million (approximately KRW 950 billion) to acquire 100% of the shares in the Argentine subsidiary of Canadian resource development company Lithium South (LIS).

LIS holds 11 mining rights covering 11,000 hectares in the Hombre Muerto salt lake in Argentina. The lithium reserves in this area amount to 1.58 million tons (in lithium carbonate equivalent). POSCO Holdings had previously acquired major mining rights in this salt lake in 2018.

Previously, POSCO Group established both brine lithium and ore lithium production systems. In Argentina, they are producing 25,000 tons annually at a brine lithium plant completed in October last year, with plans to construct a second-phase plant by 2026. For ore lithium, they process concentrate imported from Australia at the Yulchon plant in Gwangyang, South Jeolla Province, producing 43,000 tons annually.

This investment comes at a time when lithium prices show signs of rebounding. The price of lithium carbonate fell to CNY 57.5 per kg (KRW 11,850) in June this year, but rebounded to CNY 76.1 in August, marking the highest price of the year. POSCO Group Chairman Jang In-hwa stated, "Securing raw material competitiveness is crucial to becoming the world's leading lithium company, and we will diversify the global lithium supply chain through active investment."

Popular News