Pohang Iron Investment to Drive Future Growth

Pohang iron joined the global battle for lithium, the key material for electric car batteries. South Korean steelmakers are pushing their lithium business as the next generation of growth engines.

Posco is trying to acquire salt lakes, which have large lithium-rich mines in Argentina, in a move that followed the acquisition of a stake in Australian lithium-mining company in February. Growth in the POSCO lithium business is expected to accelerate further if the Salt Lake acquisition is completed. In addition, Pohang Steel will also build a second cathode material factory in Gwangyang Bay on the southern coast of South Korea.

POSCO is seeking to acquire Argentina's SaldeVida Salt Lake from the Australian lithium company Galaxy Resources, leading foreign media including Reuters reported on May 29. According to the Milky Way resources, it is estimated that Saerde has 2.5 million tons of lithium. The purchase price is about 280 million U.S. dollars. POSCO plans to complete the contract in the third quarter after obtaining the Board's approval. POSCO obtained 240,000 tons of lithium concentrate through a long-term contract with Pilbara, Australia, which refers to the high quality of processed ore, once a year.

In addition, POSCO entered into a contract with the Gwangyangwan Free Economic Zone Authority to purchase a site(165,287m2) to build a second positive material factory with an annual output of 6,000 tons. To this end, Pohang Steel held a meeting of the board of directors on May 11 to increase the capital of its subsidiary POSCOESM by 113 billion won. The core material of lithium ion secondary batteries, the positive material, is part of the lithium business promoted by POSCO at the group level.

Pohang Steel currently produces 8,000 tons of positive materials each year at the Kamei plant and plans to expand its production capacity to 12,000 tons per year in the future. In addition, by 2022, the Guangyang cathode material factory will be expanded to an annual output of 50,000 tons. If the project proceeds as planned, the annual cathode material production of POSCOESM will reach 62,000 tons per year in five years. This is enough to make about 1 million batteries for electric cars. POSCO officials stressed that POSCOESM will sell more than US$ 2 trillion in sales each year and will hire more than 1,000 new employees from 2022. By then, the cathode material factory will be completed.

POSCO also plans to build a lithium power plant in Gwangyang with an annual capacity of 30,000 tons of lithium concentrate. The power plant will sign a supply contract with Pilbara of Australia in February 2020 and build a cathode material factory in Gwangyang. The company also announced that it would build a 20,000-ton nickel production plant to make Gwangyang a secondary battery material complex. POSCO officials said: "We hope to greatly increase the synergy between business departments by building a secondary battery material complex, such as simplifying the process and reducing the logistics costs of lithium batteries, nickel batteries, and cathode material factories.

On the other hand, POSCO signed a contract for cathode materials and precursor plants jointly invested with China Huayu Cobalt in January and was selected as a cathode material business operator by Chile in March, thus improving its competitiveness in the global market. Lithium business.

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