POSCO Breaks Ground on 43,000 Ton Annual Capacity Lithium Hydroxide Plant in Gwangyang

[Asia Economy Reporter Hwang Yoon-joo] POSCO is set to ramp up production facilities for lithium hydroxide, the main raw material used in cathode materials.

On the 26th, POSCO announced the groundbreaking of a lithium hydroxide plant with an annual capacity of 43,000 tons located in the Yulchon Industrial Complex in Gwangyang. The 43,000 tons of lithium hydroxide is enough to produce 1 million electric vehicles.

About 50 people attended the groundbreaking ceremony, including POSCO Chairman Choi Jeong-woo, Jeonnam Governor Kim Young-rok, Gwangyang Deputy Mayor Kim Kyung-ho, Gwangyang Bay Free Economic Zone Authority Director Kim Gap-seop, LG Energy Solution President Kim Myung-hwan, and POSCO Chemical President Min Kyung-jun. This groundbreaking follows the approval by POSCO’s board of directors in April, and subsequently, POSCO Lithium Solution was launched as a separate corporation to extract and produce lithium hydroxide from ore.

In his commemorative speech, POSCO Chairman Choi Jeong-woo said, "In preparation for the electric vehicle era, we have selected the secondary battery materials business as a new growth engine at the group level and have begun mass production of lithium through proactive investment and technological innovation. Localization of lithium is an important foundation for POSCO Group’s growth as a 100-year company and is expected to greatly contribute to securing the competitiveness of the domestic secondary battery industry, which is fiercely competing in the global market."

The plant constructed by POSCO Lithium Solution will be built on a 196,000㎡ site within the Yulchon Industrial Complex in Gwangyang, with an investment of 760 billion KRW, aiming for completion in 2023. Lithium ore is expected to be supplied from sources such as Pilbara, Australia.

Lithium used as a raw material for cathode materials is divided into lithium carbonate and lithium hydroxide. Until now, the secondary battery industry has mainly produced cathode materials using lithium carbonate as the main raw material. However, as secondary battery technology has advanced to increase the driving range of electric vehicles, cathode materials with nickel content exceeding 80% have been developed, and demand for lithium hydroxide used in these materials is gradually increasing.

With the stable supply of lithium materials from POSCO Lithium Solution in the future, the competitiveness of the domestic secondary battery industry, which has been producing cathode materials by importing 100% of lithium from countries such as China, is also expected to be strengthened.

Meanwhile, POSCO plans to break ground within this year on a plant with an annual capacity of 25,000 tons at a salt lake in Argentina where lithium reserves have recently been confirmed. Through mid- to long-term investments in lithium extraction from ore and brine, POSCO aims to establish a lithium production system of 70,000 tons annually by 2023, 130,000 tons by 2026, and 220,000 tons by 2030.