Posco chief visits Argentina to inspect lithium mining site

Posco’s chief visited Argentina to check on the ongoing construction of a demonstration plant that extracts lithium collected from a local salt lake last week, the company said Wednesday.

Stressing the importance of the steelmaker’s operation in the South American country for its sustainable growth, Posco Chairman Choi Jeong-woo encouraged workers to complete the project safety and maintain the sound partnership with the community, the firm said.

In an intermediate survey of lithium reserve at the Salar del Hombre Muerto salt flat, Posco discovered that the site holds more lithium than expected when it signed a contract last year, according to the company.

In August last year, Posco acquired mining tenements in Argentina from Australian lithium miner Galaxy Resources for $280 million, giving the steelmaker full mining rights for an area of 17,500 hectares in a northern sector of the salt lake. Posco purchased mining tenements for additional sites nearby, raising the size of the mining site to 22,800 hectares, 27 times larger than Seoul’s financial district of Yeouido.

The land contains salt water capable of producing 25,000 metric tons of lithium a year, if extracted. It had expected to produce lithium for 20 years, but the test showed that it could continue to extract for another 30 years.

The construction of the demo plant will be completed by the first half of 2020. Combined with other facilities, Posco said it will be able to secure 65,000 tons of lithium a year.

Also last year, the company bought 4.75 percent of shares and convertible bonds of Australia-based lithium and tantalum producer Pilbara Minerals. Posco will be able to produce 30,000 tons of lithium carbonate annually from 2020, officials said.

The world’s fifth-largest steelmaker, Posco jumped into the battery component business in recent years to secure sustainable growth amid declining demand on steel.

Demand for lithium has rapidly risen on growing popularity and the business expansion of secondary cells, used to power electric cars and smartphones.

By Cho Chung-un (christory@heraldcorp.com)