POSCO Constructs First Lithium Hydroxide Plant in Korea

POSCO Holdings, the investment and holding company of South Korea's prominent steel manufacturer POSCO, announced on Wednesday the successful completion of the construction of the nation's first lithium hydroxide plant. This achievement comes against the backdrop of a global surge in resource nationalism.

Situated at the Yulchon Industrial Complex in Gwangyang, South Jeolla Province, the lithium hydroxide plant is a pivotal element of POSCO Group's strategic initiative to establish a comprehensive battery material value chain. This chain encompasses securing and processing battery raw materials such as lithium and nickel, extending to the recycling of used batteries.

Simultaneously, POSCO revealed the completion of a factory dedicated to producing non-oriented electrical steel, known as Hyper NO, at Gwangyang Steelworks—home to the company's second steel complex. Non-oriented electrical steel plays a crucial role in crafting the motor core, a fundamental component of electric vehicles.

The lithium hydroxide plant, boasting an annual production capacity of 21,500 tons, will be operated by POSCO-Pilbara Lithium Solution Co., a joint venture formed in 2021 between POSCO and Australia's lithium mining company Pilbara Minerals Ltd. POSCO has plans to construct a second lithium hydroxide plant with an identical production capacity by 2024. The combined annual output of 43,000 tons of lithium hydroxide is sufficient for powering one million electric vehicles.

POSCO initiated the lithium hydroxide plant project in June, with an estimated investment of $451 million. The company anticipates full operational status by 2025. This strategic move positions POSCO to effectively address the escalating demand for electric vehicle battery materials and align with the U.S. Inflation Reduction Act (IRA), which provides tax incentives to EV manufacturers and suppliers sourcing materials from U.S. partner countries.

POSCO is eligible for IRA benefits by securing iron ore from Australia and Argentina, processing it to produce lithium hydroxide in Korea. Previously reliant on imports for lithium hydroxide, the company has developed technology to extract it from lithium ore.

In a significant move to bolster its lithium production capabilities, POSCO Group announced a supplementary investment of $1.09 billion. In 2018, POSCO acquired lithium reserves in Argentina for $280 million, and a 2020 assessment revealed reserves exceeding initial estimates.

POSCO Holdings declared a comprehensive investment plan of $20 billion last year for rechargeable battery projects, including stakes in battery material firms, mineral mines, and associated facilities, with the aim of establishing a self-sufficient battery metal supply chain and reducing reliance on Chinese companies.