POSCO succeeded in securing equities in an Australian lithium mining company. Lithium is an essential material for production of secondary batteries. Its worldwide production is limited so lithium is called 'white gold'. As demand for electric vehicles will surge along with the fourth industrial revolution in the future, the demand for lithium-ion batteries is expected to increase explosively.
On February 27, POSCO signed a long-term contract to acquire a 9.5 percent stake in Pilbara Minerals, an Australian mining company, and purchase 240,000 tons of lithium concentrates per year. A concentrate is an ore that is processed with high-grade minerals.
Pilbara is a mine development company with a 100% stake in Pilgangoora Lithium Mine located in western Australia and is planning to gradually expand production of lithium concentrates from 300,000 tons beginning in the second half of this year.
POSCO-Australia, a POSCO corporation in Australia, will acquire 9.5% equities in Pilbara. With this contract, POSCO will be able to mass-produce lithium carbonate with a production capacity of 30,000 tons from 2020 with raw material supplier Pilbara. POSCO will not be left behind in competition for securing lithium resources by securing equities in the lithium carbonate mine in Australia.
Meanwhile, POSCO is also expanding its cathode materials and precursor business. Cathode materials and precursors are other material for lithium-ion batteries. POSCO will expand sales of them for electric vehicles and increase production bases at home and abroad.
In connection with this, POSCO signed a contract with Huayou Cobalt to establish two joint venture corporations -- a precursor production corporation and a cathode material production corporation -- in Zhejiang Province, China. Huayou Cobalt is the world's largest cobalt producer which produces about 50% of cobalt for production of lithium ion batteries in the world.