Lithium Project in Chile
A consortium between POSCO and Samsung SDI was selected as a cathode producer in Chile, the world's largest producer of lithium, a base material for cathodes. POSCO will be able to grow into a global cathode producer, expanding its business into South America following its entry into the Chinese cathode market earlier this year. In addition, Samsung SDI laid the foundation for the long-term stable supply of cathodes, a key material for batteries.
On March 11, industry sources said that the Chilean Production Development Corporation (CORFO) announced that the corporation selected the consortium as an entity in charge of a lithium project to produce cathodes locally with lithium as its raw material. CORFO had invited bids for the project in order to expand the lithium downstream industry and fostered the Chilean industry since May last year. The POSCO-Samsung SDI Consortium won the ticket by getting the better of 12 companies from seven countries including Chile, the US, Canada, China, Russia, and Belgium.
POSCO and Samsung SDI will set up a joint venture for cathode production in Mejillones City in northern Chile by investing 57.5 billion won and produce 3,200 tons of high capacity cathodes for electric vehicles starting in the second half of 2021.
Experts say that POSCO and Samsung SDI laid the groundwork for vying with global rivals in the cathode and battery sectors with high growth potential. In January, POSCO established a joint venture with Huayou Cobalt of China and the joint venture will produce 46 million tons of cathodes beginning in 2020, making a full-scale entry into the Chinese market. "As we expanded our secondary battery business area from China to South America, we became a global cathode producer," explained an official of POSCO.
In addition, this news is meaningful in that Samsung SDI secured materials to preoccupy the fast-growing market of batteries for electric vehicles and energy storage systems (ESSs). "A joint venture, which will be established for the Chilean Lithium project will play a pivotal role in stably supplying materials for the growing electric vehicle battery industry," said Jeon Yeong-hyun, president of Samsung SDI.
In recent years, stronger eco-friendly policies in various countries around the world have driven up demand for large-capacity batteries for electric vehicles, industrial ESSs, and information technology (IT), thereby expanding the market of cathodes which are an essential material for lithium ion batteries a great deal. The cathode market is expected to more than quadruple from 210,000 tons in 2016 to 860,000 tons in 2020.