POSCO Holdings hosted a groundbreaking ceremony for a brine lithium plant based at Salar del Hombre Muerto (Salt Lake), located at an altitude of 4,000 meters in Salta Province, Argentina.
POSCO Group is the first company to produce lithium hydroxide in Argentina through a whole process, ranging from acquiring mining rights to exploration, and construction and operation of a production plant.
Among those on hand at the event were POSCO Group Chairman & CEO Choi Jeong-woo, POSCO Holdings Eco-friendly Future Materials Team Leader Yoo Byeong-og, POSCO Argentina Chief Kim Kwang-bok, Governor of Salta Province Gustavo Saenz, and Governor of Catamarca Province Raul Jalil, South Korean Ambassador to Argentina Jang Myung- soo.
Chairman Choi’s participation in the event was his first visit to an overseas operation since the inauguration of the group’s holding company and his on-site visit to the lithium business, one of the group’s seven core businesses.
The brine lithium plant, capable of producing 25,000 tons of lithium hydroxide annually, is scheduled to be dedicated by the first half of 2024.
The project will cost a combined $830 million (950 billion won), including costs for infrastructure investments and operational fund.
POSCO Argentina, a wholly owned subsidiary of POSCO Holdings, the group’s holding company, will be responsible for construction and operation of the lithium plant and securing funds.
On top of the launching of the lithium project, POSCO plans to make a second phase investment to add 25,000 tons to its annual production capacity this year, with a goal of raising its annual capacity to 50,000 tons by the end of 2024.
The group plans to expand the annual lithium production capacity from the same salt lake to a maximum of 100,000 tons by 2028.
In his commemorative speech, Chmn. Choi said, “Today is a historic day for Argentina, Korea and POSCO Group, and the reason is that POSCO, which has prepared for the lithium business for several decades, has made a great first step today.”
The brine lithium project will be a key to POSCO Group’s secondary battery raw material business, he said. Securing a stable amount of lithium, a raw material for cathode material, will strengthen the whole value chains of the group’s secondary battery raw material business, he added.
The 25,000 tons of lithium hydroxide POSCO Group will produce from the plant will be enough to supply about 600,000 EV units.
If its production capacity is raised to 100,000 tons of lithium hydroxide, it will be sufficient to power about 2.4 million EV units.
With rising global demand for electric vehicles, battery companies around the world are scrambling to secure lithium and POSCO Group has in advance secured a large amount of lithium, a key material for cathode materials, thus dramatically ramping up the competitiveness of POSCO Chemical’s cathode material business.
The battery material business has gained a clear upper hand in the world. Since cathode materials are mainly made of lithium, nickel, and manganese, securing adequate supplies of these raw materials leads to competitiveness in the cathode material business.
The POSCO Group preemptively took over the Salar del Hombre Muerto salt lake in Argentina in 2018 in response to the prospect of a global lithium supply shortage due to the full-fledged electric vehicle era.
Montgomery & Associates, a global brine lithium consulting company, confirmed at the end of 2020, that the lithium reserves, based on lithium carbonate in the salt lake, are 13.5 million tons, which is six times the 2.2 million tons estimated at the time of the acquisition.
Considering the mining possibility and yield, it is expected that at least 2.8 million tons of lithium carbonate will be produced. Because the lithium concentration in this salt lake recorded an average of 921 mg/L, indicating that it has the highest lithium content among all of Argentina’s salt lakes, and coupled with the lake’s low concentration of impurities like magnesium, it is projected to have the world’s highest yield.
In addition, by applying POSCO Group’s independently developed lithium extraction technology, the company has secured global competitiveness in terms of productivity by dramatically shortening production time and improving yield.
The currently skyrocketing price of lithium has reached five times the price when the lake was acquired (market price of $70,000 per ton of lithium).
Considering the normal operating profit margin of 50 percent in the lithium mining industry, the lake is forecast to produce ten trillion won in accumulated operating profit.
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