Posco International signs $10 million deal with FARU Graphite

Posco International signed a $10 million deal with Tanzania-based FARU Graphite to source graphite, signaling its entry into the battery material business.

Posco International signed a $10 million deal with Tanzania-based FARU Graphite to source graphite, signaling its entry into the battery material business.

Under the deal, Posco International will source 750,000 tons of natural graphite, a core raw material of anodes, one of four critical components to make lithium-ion batteries, over the next 25 years.

FARU Graphite, a subsidiary of Black Rock Mining, owns the Mahenge Project in Tanzania. The mine has the world's second-largest natural graphite reserves.

The graphite will then be supplied to Posco Future M, a battery material company 60 percent owned by Posco Holdings. Posco Holdings also owns 63 percent of Posco International and 15 percent of Black Rock Mining.

Demand for graphite will surge 6.5-fold by 2035, according to data from Benchmark Mineral Intelligence.

Since completing a merger with Posco Energy on Jan. 1, the Korean company has been expanding its business portfolio. It is the country's largest supplier of copper coil material, an ingredient used to make anodes, and has around 80 clients globally.

It recently jumped to the used-battery recycling business after signing a black powder deal with Posco HY Clean Metal, a joint recycling venture between Posco Zhejiang-based Huayou Cobalt.

Black powder is a mixture of nickel, cobalt and manganese produced after recycling, which can be reused as a raw material in cathodes. Cathodes are the critical component in making electric vehicle batteries and take up 40 percent of battery cost.

BY SARAH CHEA [chea.sarah@joongang.co.kr]