POSCO Holdings Inc. on Tuesday signed a memorandum of understanding with Hancock Prospecting, an Australian mining company, to build a plant to annually produce 30,000 tons of lithium, a key electric vehicle battery material.
The two companies will look for candidate sites for the factory and finalize details such as investment amount in the facility construction later, POSCO said in a press release.
With the preliminary agreement signed online, they will expand partnership beyond iron ore and natural gas production.
POSCO is striving to strengthen its EV battery material supply chain ranging from lithium mining and sale lake lithium extraction to cathode materials and recycling, leveraging Hancock’s various mining resources.
It also wants to make the use of a slowdown in the global EV demand to secure EV battery resources.
In 2010, the steel giant bought a 12.5% stake in Hancock’s iron ore mine Roy Hill. In 2020, the two companies jointly acquired Senex Energy, an Australian natural gas supplier.
In 2018, it acquired the Salar del Hombre Muerto Salt Lake in northwest Argentina.
This year, POSCO completed a factory to produce salt lake lithium and another for lithium mining in Argentina with an annual capacity of 25,000 tons and 43,000 tons, respectively. They are enough to churn out about 1.6 million units of EVs.
Their partnership is expected to shield their customers, or EV battery makers, from the US regulations in line with the Inflation Reduction Act.
Under the Act signed into law in 2022, the US will grant subsidies only for EVs assembled, or with a certain portion of their components produced in the US and a free trading partner.
By Yeonhee Kim
yhkim@hankyung.com
Jennifer Nicholson-Breen edited this article.
