Posco Holdings breaks ground on lithium hydroxide production plant

Posco Holdings broke ground on a 575-billion-won ($451.5 million) production plant for lithium hydroxide for electric vehicle (EV) batteries at Yulchon industrial complex in South Jeolla, Tuesday.

Posco Group Chairman Choi Jeong-woo, sixth from left, and People Power Party lawmaker Ahn Cheol-soo, fifth from left, pose for a photo during a groundbreaking ceremony for Posco Holdings' lithium hydroxide plant in South Jeolla, Tuesday, with representatives from LG Energy Solution and SK On [POSCO HOLDINGS]

Posco Holdings broke ground on a 575-billion-won ($451.5 million) production plant for lithium hydroxide for electric vehicle (EV) batteries at Yulchon industrial complex in South Jeolla, Tuesday.

It is the first of its kind in Korea, according to the company.

The groundbreaking came after Posco Holdings announced its plan to build two lithium factories — a lithium carbonate factory near the Salar del Hombre Muerto salt lake in northern Argentina, and a lithium hydroxide plant in South Jeollla — in October last year.

Posco Holdings plans to ship lithium carbonate produced in the Argentina plant to the Yulchon facility in Korea to make lithium hydroxide. Lithium hydroxide is one of the core materials to make cathodes, which account for 40 percent of the production cost of an EV battery.

Posco Holdings is pouring some 575 billion won into building the lithium hydroxide plant through Posco Lithium Solution, its wholly-owned subsidiary, which will fund, build and run the new plant. The lithium plant, which is slated for completion in 2025, will produce 25,000 tons of lithium hydroxide a year, which is enough for batteries for 600,000 EVs.

In 2018, Posco acquired mining rights of the Hombre Muerto salt lake from Applecross, Australia-based Galaxy Resources for $280 million. It discovered last year that the lake has 13.5 million tons of lithium reserves, or six times the amount it was projected to have in 2018.

Posco Holdings has been building a 25,000-ton first-stage lithium hydroxide factory in Argentina since March last year, which will be completed in the first half of 2024.

Posco Holdings aims to expand its lithium production capacity based on brine resources from the Hombre Muerto salt lake to 100,000 tons by 2028.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]