POSCO Holdings begins lithium extraction project in Canada

[Courtesy of POSCO Holdings]

South Korea’s POSCO Holdings is set to directly extract lithium, a key component in electric vehicle batteries, in Canada. The project is a significant step to strengthen the company’s supply chain for lithium, the core material in electric vehicle batteries, in North America, by using unconventional lithium resources such as clay and oil-field brine in addition to the conventional ore and brine.

On Wednesday, POSCO Holdings signed a memorandum of understanding (MOU) to secure lithium from oil-field brine with Invest Alberta Corporation (IAC) at the Canadian Embassy in Seoul. Oil-field brine is a type of brine found around oil reservoirs, and it contains minerals including lithium, which can be used as raw materials for EV batteries.

“Alberta is a region at the center of Canada’s oil and shale gas industry and has garnered attention for having the world’s largest stockpile of lithium in oilfield brine,” POSCO Holdings said in a statement.

With the MOU in hand, POSCO Holdings intends to explore opportunities to expand its operations in Canada, look for partners to develop lithium extraction for resources found in oilfield brine and evaluate investments in mining. IAC is expected to provide administrative support and information related to resource development and tax incentives for POSCO Holdings’ investments.

Lithium is primarily found in ores and brine, but companies are increasingly investing in the commercial production of unconventional sources such as clay and oil-field brine.

While the lithium content in oilfield brine could be lower compared to conventional ores and brine, the United States and Canada have reported significant deposits, making it an emerging resource. Multinational companies are actively pursuing the development and commercialization of methods for direct lithium extraction from oilfield brine.

Leveraging its accumulated expertise and capabilities from its lithium projects in Argentina and Australia, POSCO Holdings is actively exploring investment and research and development for the commercialization of lithium extracted from oilfield brine. The company is also advancing a clay-based lithium project in the United States. POSCO Holdings signed an MOU with Australian mineral company Jindalee Resources earlier in the year for a U.S. clay-based lithium project.

Once it confirms that clay-based lithium extraction is commercially viable, POSCO Holdings plans to engage in further discussions and collaborations with Jindalee Resources. “We are currently assessing the lithium extraction process and commercial viability using clay samples,” the company said.

By securing a lithium production hub in North America, POSCO Holdings is bracing for the impact of the U.S. Inflation Reduction Act (IRA), which was designed to reward electric vehicle batteries made from minerals extracted only in North America or countries with free trade agreements with the United States.

POSCO Group, centered around POSCO Holdings, is actively securing a stable supply chain for EV battery minerals, materials, finished products, and recycling. POSCO Holdings has set a goal to achieve a lithium production capacity of 423,000 tons by 2030, with revenue from its lithium business and an EBITDA goal of 13.6 trillion won and 8.5 trillion won respectively.

Starting with the completion of a 43,000-ton ore lithium plant in Gwangyang, POSCO Group will sequentially operate a 25,000-ton lithium production plant in Argentina in the second quarter of 2024.