South Korean steel giant Posco Group said Friday it has completed the construction of the second lithium hydroxide plant in Korea, which will drive up domestic production of this key material used in secondary batteries.
The new facility, operated by Posco Pilbara Lithium Solutions, a joint venture, is located at the Yulchon Industrial Complex in Gwangyang, South Jeolla Province. It is the second of its kind after the first plant was constructed in November 2023.
Each plant can produce 21,500 tons of lithium hydroxide annually, and the combined amount of 43,000 tons is sufficient to produce batteries for approximately 1 million electric vehicles per year, according to the company.
“The completion of these plants marks a significant milestone in Posco Group’s efforts to ensure a stable domestic supply of lithium, a key material in the battery industry. This positions us to lead in both steel and battery materials, paving the way to become a global top-tier lithium company,” Posco Chairman Chang In-wha said during the plant's opening ceremony.
Posco Pilbara Lithium Solutions is a joint venture between Posco Holdings and Australian mining company Pilbara Minerals, with the Korean steel group holding an 82 percent stake. For stable supply of the lithium ores, Posco Holdings signed a 20-year supply contract with Pilbara Minerals and secured a 4.75 percent stake in the company in 2018.
The ceremony on Friday was attended by government and company officials, including Prime Minister Han Duck-soo, South Jeolla Governor Kim Yung-rok, Rep. Kwon Hyang-yup, Korea Development Bank Chairman Kang Seog-hoon, Posco Pilbara Lithium Solutions CEO Lee Kyung-seop, Australian Ambassador Jeff Robinson and Pilbara Minerals board member Steve Scudamore.
According to the company, the first manufacturing plant uses Posco's proprietary technology to minimize by-products and reuse auxiliary materials. The new facility in Gwangyang adopts an extraction method widely used in countries like China and Australia, the company said. This dual approach enhances flexibility for market shifts and supports future expansion, Posco explained.
Posco added that processing Australian raw materials domestically ensures the entire production aligns with Korea-US free trade agreement terms to reduce geopolitical risks and enable compliance with US and EU regulations for easier global market access.
The company plans to supply 20,000 tons of lithium hydroxide annually to Posco Future M, its cathode material arm, with a potential increase to 30,000 tons. Posco Pilbara Lithium Solutions also signed a three-year contract with SK On on Nov. 22 to supply up to 15,000 tons annually, the company said.
