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| A demonstration plant for lithium extraction in Argentina / Courtesy of POSCO |
Steel giant to begin construction of lithium hydroxide plant
By Baek Byung-yeul
POSCO is accelerating its commercialization of lithium hydroxide by establishing a lithium extraction plant near a salt lake in Argentina. The company is also pushing forward to set up a joint venture for solid electrolyte materials, used for solid-state batteries.
The company said Thursday that its board of directors approved an investment project to produce lithium hydroxide through the Salar del Hombre Muerto salt lake in northern Argentina. The total investment cost is around $830 million including costs for infrastructure and operating funds.
POSCO plans to start construction of the plant in the first half of 2022. The plant, which is expected to be completed in the first half of 2024, will have an annual production capacity of 25,000 tons. POSCO is also considering investing in expansion of the facility to add an additional 25,000 tons.
The company expects demand for lithium hydroxide to keep increasing, as the battery material is regarded as superior to lithium carbonate in terms of providing a longer single-charge travel distance for electric vehicles (EVs). It said the 25,000 tons of lithium hydroxide could be used in around 600,000 EVs.
Forecasting that the global demand for lithium will explosively increase, POSCO began preparing for commercial production of the material taking advantage of the lake, for which it purchased lithium mining rights from Australian lithium miner Galaxy Resources for $280 million in 2018.
At that time, POSCO estimated that the site had 2.2 million tons of lithium reserves, but last year it was able to confirm that the lake contains 13.5 million tons of lithium reserves. For lithium commercialization, the company has operated a demonstration plant for over a year near the salt lake.
"Global market research institutes such as JP Morgan and Roskill estimate that a shortage of lithium supply will occur worldwide in 2024 due to the fast-growing EV market. Sales prices of lithium are currently at around $35,000 per ton, up over five times from 2020, and the price will continue to go up in the following years," POSCO said.
The announcement was its first move since POSCO decided to adopt a holding company structure on Dec. 10. Its board members voted to separate the steel giant into two entities ― a holding company named POSCO Holdings and its wholly owned steel business unit tentatively similarly named POSCO, starting next March 1.
Under the holding company system, POSCO aims to diversify its business portfolio including materials for secondary batteries. It aims to increase its annual production capacity of lithium to 110,000 tons by 2025 and 220,000 tons by 2030.
In addition to lithium, the company is also setting up a strategy to procure materials for solid-state batteries, which are known as next-generation batteries as they are safer and have higher energy densities compared with existing ones.
To that end, the company plans to set up a joint venture with a firm that is capable of manufacturing solid electrolytes, a core material for solid-state batteries, to operate a demonstration plant.
