POSCO is expanding its lithium production capacity to cope with the rapidly growing demand for electric vehicle batteries.
According to industry sources on Jan. 6, Australian mining company Pilbara Minerals disclosed through the Australian Securities Exchange (ASX) on Jan. 2 that it has signed an MOU with POSCO to increase the production capacity of a joint venture lithium plant to be built in Korea by 33 percent.
POSCO will build the lithium plant in Gwangyang on the southern coast and produce 30,000 tons of hydroxide lithium and lithium carbonate from 2020 using the lithium concentrate from Pilbara. Lithium concentrate refers to a high-quality ore that is produced by processing natural minerals containing lithium. Lithium hydroxide and lithium carbonate are materials used for electric car batteries.
Pilbara has a 30 percent stake in POSCO's Gwangyang lithium plant, which will increase the production volume of lithium hydroxide and lithium carbonate from 30,000 tons to 40,000 tons according to the newly signed MOU. To this end, POSCO will increase the amount of lithium concentrate it will purchase from Pilbara by 31 percent from 240,000 tons to 315,000 tons per year.
Last February, POSCO signed a long-term contract to purchase up to 240,000 tons of lithium concentrate per year from Pilbara, which owns 100 percent of the Western Pilgangoora lithium mine in Western Australia.
Pilbara has reportedly started to expand the mine to meet the increased supply of Lithium concentrate to POSCO. In addition, its board of directors will complete the necessary procedure for investment in the lithium plant by this May. This MOU is not legally binding, unlike the MOU concluded in February of last year, but it indicates that POSCO has high expectations for the Lithium business.
POSCO plans to cultivate the lithium business as a new growth engine by investing 10 trillion over the next five years. Global demand for lithium is expected to increase from 250,000 tons in 2017 to 710,000 tons in 2025 with the expansion of the electric vehicle market. The International Energy Agency (IEA) projected the sales volume of electric vehicle to grow to 21 million units (13% of the total) by 2030.