Gwangyang, Jan. 7 (Korea Bizwire) — To meet rising demand for lithium, a base material for batteries, that is increasing along with the rapid growth of the electric car market, Posco has decided to expand the lithium plant that it plans to build in Gwangyang, South Jeolla Province.
Posco’s new lithium business, in which it plans to invest 10 trillion won ($8.9 billion) over the next five years, is also on track.
Posco recently signed a memorandum of understanding with Australia’s Pilbara Minerals to increase the size of the lithium plant by 33 percent over the original contract.
Posco’s upcoming lithium plant in Gwangyang will begin producing 30,000 tons of lithium hydroxide and lithium carbonate annually starting in 2020, using lithium concentrate supplied by Pilbara Minerals.
Lithium concentrates refer to high caliber ores processed from natural ores. Lithium hydroxide and lithium carbonate are used as materials for secondary batteries, including electric batteries used in electric cars.
Pilbara has acquired a 30 percent share in the Gwangyang lithium plant.
The new memorandum will raise the production of lithium hydroxide and lithium carbonate to 40,000 tons, as opposed to the original plan of 30,000 tons.
Consequently, Posco will be purchasing 315,000 tons of lithium concentrates each year, a 31 percent increase from the original plan. Originally, Posco signed a contract last February with Pilbara, which owns a lithium mine in West Australia, to purchase as much as 240,000 tons of lithium concentrates annually.
“Posco and Pilbara agreed to consider expanding the amount of lithium concentrates that Posco will purchase, in order to meet the demands of our clients in South Korea and their associates,” said Pilbara.
Pilbara is currently expanding the mine to meet the new production requirements. It aims to complete all relevant administrative procedures by May to commence with the investment in the lithium plant.
Despite the new memorandum being non-binding on both parties, it reassures associates of Posco’s brighter outlook for the project.
“The project is on due course, and we are convinced of its potential,” said a source from Posco.
Posco expects that global demand for lithium will increase from 250,000 tons as of 2017 to as much as 710,000 tons by 2025. The process may accelerate depending on the expansion of the electric car market.
Posco is running head on towards the lithium business as it plans to develop efficient lithium extraction technology, and build new plants and assembly lines for cathode materials by investing 10 trillion won ($8.9 billion) by the year 2023.
“It is important that we lead the way in a global race for material production for secondary batteries,” said Choi Jung-woo, president of Posco.
H. M. Kang (email@example.com)