Korea’s Posco Holdings is doubling down on lithium despite a market downturn, investing a total of $830 million in Australia and Argentina to lock in long-term supply and cost competitiveness for its fast-growing battery materials business, according to the firm on Wednesday.
The move — which includes a $765 million direct mining stake in Australia’s Mineral Resources and a $65 million acquisition in Argentina’s Hombre Muerto salt lake — shows the Korean steelmaker’s determination to secure raw materials ahead of a potential rebound in electric vehicle demand and lithium prices.
Through this investment, Posco will acquire a 30 percent stake in a new joint venture with Mineral Resources, a leading Australian lithium producer.
The investment will expand Mineral Resources’ Wodgina and Mt. Marion lithium mines, allowing Posco to secure 270,000 tons of spodumene concentrate each year. By refining this hard-rock lithium, Posco aims to produce about 37,000 tons of lithium hydroxide annually — enough for roughly 860,000 electric vehicles.
Despite lithium hydroxide prices currently being just 10 percent of their 2022 peak of $85 per kilogram, mainly due to Chinese oversupply, Posco said it is "investing aggressively" to maintain cost competitiveness and ensure a stable supply ahead of competitors.
Beyond raw material sourcing, Posco plans to expand its partnership with Mineral Resources into lithium refining once the global market recovers, alongside a rebound in EV demand.
“Posco Holdings’ investment is a testament to the long-term value of Wodgina and Mt. Marion, and Mineral Resources’ reputation as a mining operator,” said Chris Ellison, CEO of Mineral Resources. “Together, we are committed to developing these Tier 1 operations to their full potential.”
At the same time, Posco is accelerating efforts to secure brine-based lithium in Argentina, often used to produce lithium carbonate, an essential material for lithium iron phosphate batteries used in EVs and energy storage systems.
Earlier this month, the company acquired the Argentinian subsidiary of Canada’s Lithium South Development Corp. for $65 million, expanding its mining rights in the Hombre Muerto salt lake, known for its high-grade lithium deposits.
Posco has participated in the salt lake project since 2018 and, through the latest acquisition, gained additional resources, land and existing facilities, adding momentum to its lithium business under its local subsidiary Posco Argentina.
Since CEO Chang In-hwa took office in March 2024, Posco Group has been restructuring its portfolio by selling low-profit units and focusing on steelmaking, battery materials and future growth businesses.
The company’s secondary battery materials business posted a loss of 42 billion won ($28.6 million) in the third quarter, but rising global lithium prices and increased cathode material sales helped reduce the loss from 144 billion won in the previous quarter and 53 billion won in the same period last year.
“Securing raw material competitiveness is essential for becoming the world’s leading lithium company,” CEO Chang said. “We will continue to diversify our global lithium supply chain through active investment.”
forestjs@heraldcorp.com
