POSCO Chairman Choi Jeong-woo gives words of encouragement to POSCO workers as he toured a FINEX plant of Pohang Steelworks. (Photo: POSCO)

POSCO plans to build a lithium processing plant capable of producing 40,000 tons of lithium carbonate equivalent per annum in Gwangyang, Jeollanam-do. With its eye on a project to build another lithium plant in Argentina, POSCO plans to have a high-purity lithium production structure with an annual capacity of 65,000 tons by 2022.

Business sources said POSCP’s move may be construed as an attempt to achieve self-sufficiency from its dependence on Chinese-made high-purity lithium imports for batteries. POSCO Chairman Choi Jeong-woo said POSCO aims to chalk up 17 trillion won in the battery materials segment and take up a 20 percent share in the global market by 2030.

POSCO and Australian miner Pilbara Minerals agreed to launch a joint-venture project to build a lithium hydroxide and carbonate chemical conversion facility at the Yulchon Industrial Complex in Gwangyang at a cost of 800 billion won next March. POSCO is known to have a 79 percent stake and Pilbara Materials, the remaining 21 percent share.

POSCO is expected to have a board of directors’ meeting to give a go-ahead to the new plant project this year. The new plant is to be dedicated by 2020.

The capacity of 40,000 tons of lithium carbonate equivalent means supplying battery chemicals necessary for the production of 400,000 units. Currently, about 2 million EV units are sold around the globe annually.

Korean cathode materials makers ECOPRO PM and COSMO AM&T now produce high-purity lithium materials, but output is insufficient to meet demand, so Korean companies depend on imports to fill the gap. The nation imported 12,344 tons of lithium carbonate equivalent.

POSCO is now operating a pilot lithium processing plant in Gwangyang, capable of producing 2,500 tons of lithium carbonate equivalent annually.

The pilot facility, which was on stream in April last year, can have a yield rate of more than 80 percent, so commercial production can be launched in time for the dedication of the new plant, a POSCO official said.

A Lithium-ion battery generates electricity through chemical reactions of lithium.

Lithium ion naturally flows back to the cathode through the electrolyte, and the electrons (e-) separated from lithium ions move along the wire generating electricity.

The price of cathode accounts for 40 percent of that of battery. POSCO Chemical, a subsidiary of POSCO Group, operates a cathode plant in Gumi, Gyeongsangbuk-do, and another one in Zhejiang, China. POSCO Chemical also produces anode materials.

POSCO is pushing to foster a secondary battery materials as its future growth engines. In 2010, POSCO succeeded in developing a technology to directly extract lithium from seawater.

POSCO Chairman Choi, who took office in July last year, is accelerating efforts to expand the materials business. In late last year, POSCO restructured its organization to elevate the standing of the materials business to the level of a mainstay steel business. This past June, POSCO established the secondary battery materials research center.

The POSCO Management Research Institute predicted that the global demand of lithium will skyrocket from 250,000 tons this year to 820,000 tons in 2025. Lithium supply is expected to be insufficient to meet demand since massive investments are required to secure mines and build plants, analysts said.

In February last year, POSCO acquired 4.7 percent of Pilbara Materials for 65 billion won to secure a stable supply of lithium concentrate. The Australian minder has mines with reserves of 26,000 tons of lithium concentrate.

POSCO signed a contract to buy lithium mining rights in Argentina. The deal gives POSCO mining rights for an area of 17,500 hectares in a northern sector of the Salar del Hombre Muerto salt flat in northwestern Argentina.

POSCO plans to build a lithium processing plant capable of producing 25,000 tons of lithium carbonate equivalent by 2021.