Posco to start Argentina lithium project in early 2020

South Korean steel producer Posco has already decided to go forward with building a commercial-scale lithium hydroxide plant in Argentina after previously saying that a decision would be made in next year's first half.

The final investment decision was expected to be based at least partly on the performance of a demonstration plant that is currently being built and being tested at Posco's mining concession in the Salar del Hombre Muerto salt flat in northern Argentina. But the company said yesterday that construction of its 25,000 t/yr lithium plant on the site will begin in next year's first half.

Posco has been fast-tracking development plans in Argentina to capitalise on surging demand for electric vehicle (EV) battery materials. The company bought its Argentinian mineral rights from Australian mining firm Galaxy Resources for $280mn last November. Posco yesterday said it raised its estimate of lithium deposits on the site to 5.67mn t from 2.25mn t, which will enable it to maintain output of 25,000 t/yr for 50 years rather than the previous target of 20 years.

Construction of the commercial plant will take about 18-24 months to complete. A 40,000 t/yr lithium carbonate plant that Posco and joint-venture partner Pilbara Minerals have under development in South Korea also will take 18-24 months to finish.

Posco aims to capture a 20pc share of the global battery materials market and is eager to position itself for an expected demand boom. Lithium prices have fallen this year after spiking in 2018, at least partly because the Chinese government has reduced EV subsidies, slowing demand growth, Posco said. But the company sees prices rising after 2020, especially when European automakers roll out the next generation of EV models in 2022. "Demand will also follow in a major scale," it added.