SEOUL– POSCO, the world’s fifth-largest steelmaker by output, said Wednesday it will build a plant in South Korea to extract lithium hydroxide, a key material for electric vehicle (EV) batteries.
POSCO said its board of directors approved the plan last week to build a plant in the southern industrial city of Gwangyang by 2023.
The plant, on which construction is set to begin in the first half of the year, will have an annual production capacity of 43,000 tons of lithium hydroxide, which is enough to manufacture about 1 million electric vehicles.
POSCO said it plans to import spodumene from Australia, from which lithium hydroxide will be extracted at the plant.
Separately, POSCO is set to begin building a plant in the coming months near the Salar del Hombre Muerto salt lake in northern Argentina. The plant will have an annual production capacity of 25,000 tons of lithium.
POSCO bought lithium mining rights in Argentina from Australian lithium miner Galaxy Resources for US$280 million in 2018. Currently, the steelmaker has mining rights for an area of 22,800 hectares in the region.
The site is confirmed to contain 13.5 million tons of lithium reserves, which is enough to make batteries for about 370 million electric cars, according to POSCO.
Initially, POSCO estimated that the site has 2.2 million tons of lithium reserves.
POSCO said it plans to boost its annual production capacity of lithium at home and abroad to 220,000 tons by 2030.
South Korea’s steel giant POSCO Group has been pushing to boost its EV business in recent years as part of a diversification strategy.
In February, POSCO Chemical Co., an affiliate of POSCO, announced its plan to invest 275.8 billion won (US$248 million) to expand its production capacity of cathodes, a key component for EV batteries.
POSCO Chemical said the plant in Gwangyang will boost its annual production capacity of cathodes to 100,000 tons by 2023, which is enough to manufacture about 1.1 million electric vehicles equipped with 60 kilowatt-hour battery packs.
POSCO Chemical also said it plans to set up plants in China and Europe to timely supply cathodes to EV battery makers.
The EV battery market has been on a roll as automakers around the world race to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming.
In December, POSCO agreed to buy a 15 percent stake in Black Rock Mining, an Australia-based graphite producer, for $7.5 million.
The deal will pave the way for POSCO to secure graphite fines, a material required to make anodes, according to the steelmaker.
An anode is a key material in a battery that preserves lithium coming from the cathode and generates electricity while releasing lithium.
A cathode is one source of lithium in a lithium-ion battery and is also a key component of EV batteries.
Source: Yonhap News Agency