POSCO, the world’s fourth-largest steelmaker, is stepping up efforts to expand into South America’s infrastructure and natural resource development projects.
On Saturday, POSCO chief executive Chung Joon-yang, who was on a four-day tour of Chile, Ecuador and Honduras, signed a memorandum of understanding with Li3Energy to provide technological and financial collaboration.
POSCO chief executive Chung Joon-yang (left) and Honduras President Porfirio Lobo Sosa shake hands after signing an MOU on the country’s infrastructure in Honduras on Wednesday. (POSCO)
Li3Energy is a Peru-based resource development company that holds 60 percent stake in the Maricunga salt flats in Chile. The salt flat is estimated to hold 120 metric tons of lithium carbonate, and Li3Energy plans to begin drilling during the second half of the year, and production is slated to begin in 2013.
Under the agreement, a lithium extraction plant will be built in Chile once POSCO’s Research Institute of Industrial Science and Technology completes developing the necessary technologies.
In addition, POSCO will conduct due diligence on Li3Energy until August and acquire stakes in the Peruvian resource developer.
Lithium is widely used to produce batteries for portable electronics devices, and with electric vehicles gaining weight as an alternative to internal combustion engine-driven automobiles, the demand for the element is expected to increase to about 2 million tons in 2050, the company said.
According to POSCO, about 100,000 tons of lithium was used last year.
As such, the steelmaker has placed significant emphasis on lithium and concerned technologies in its drive to expand its business outside of the steel industry.
As part of its project, POSCO has operating a number of related projects including a collaborative research project with the Ministry of Land, Transport and Maritime Affairs to develop technologies for extracting lithium from sea water.
On May 4, Chung also signed an MOU with the Honduras government to take part in the country’s infrastructure and urban development projects.
According to the steelmaker, Honduras has been pushing infrastructure development projects as part of its economic development plans, and has shown interest in POSCO’s involvement in its mineral resource and business complex projects.
With its government adopting open economic policies and increasing foreign investment, Honduras has been recording a more than 5 percent annual growth rate in recent years, POSCO said.
By Choi He-suk (email@example.com