[Report] A 20,000km One-Way Trip... POSCO Extracting 'White Oil' in Argentina... The Reason Behind the 'Lithium Jackpot'

Breathing Is Difficult on the Other Side of the Earth in Salta Province, Argentina
POSCO Lithium Plant Located at 4,000m Altitude
Extracting Lithium Worth 100 Million KRW per Ton from Brine Containing 0.9g per Liter

8-Hour Transport of Heavy Equipment Like Excavators to High Altitude
Constructing Production Plant While Overcoming Altitude Sickness

POSCO Holdings Creating Something from Nothing in High Altitude Where Even Flora and Fauna Struggle to Survive

Jaehoon Oh, Deputy General Manager of DP Production Technology at POSCO Argentina, is explaining about the POSCO lithium pond located at Hombre Muerto Salt Lake in Argentina.

[Asia Economy (Salta, Argentina) = Reporter Donghoon Jung] 'Sal de Oro Plant' (Sal de Oro Plant, Spanish for 'Golden Salt' factory)

This is the name of POSCO Holdings' lithium salt lake project in Argentina. On the 12th (local time), the Hombre Muerto salt lake in Salta Province, northwestern Argentina, where I visited, was located at an altitude of 4,000 meters, making even breathing difficult. Here, a demo plant (pilot production factory) for mining and refining lithium, a key battery material priced at over 100 million KRW per ton, is being constructed by a domestic company for the first time. POSCO plans to build a factory producing 100,000 tons of lithium by 2030 and produce lithium, the foundation of the battery supply chain, using Korean technology. In the remote highlands of Argentina, 20,000 km one-way from Incheon Airport, South Korea, and more than 25 hours by flight, POSCO is creating a milestone for 'Korean-style lithium' production.

Extracting lithium from a high-altitude salt lake where even breathing is difficult... Building 'lithium know-how' at 4,000m altitude from drying to impurity removal

The Hombre Muerto salt lake visited on the 12th (local time) was located in the vast and beautiful 'Puna' (high plateau plain). Despite the beautiful scenery, living there was not easy. Walking a little faster or on a slope made breathing difficult and caused dizziness. Some reporters who visited the salt lake had to rely on oxygen respirators.

The process of extracting lithium was not easy either. Brine containing about 0.9g of lithium per liter, located hundreds of meters underground, is pumped up through wells. Then, in 'ponds' similar to salt fields where seawater is dried to produce salt, a four-stage drying process continues. Jaehoon Oh, Deputy General Manager of POSCO Argentina DP Production Technology (Senior Manager), who gave a briefing on site, said, "Increasing the concentration by pumping salt lake water is an important process," adding, "The northeastern area of the Hombre Muerto salt lake purchased by POSCO is among the highest lithium content areas in Argentina."

During the four-stage pond drying process, the concentrated brine undergoes an 'upper process' to remove impurities such as calcium and magnesium and then goes through another drying process to remove remaining moisture. The lithium phosphate produced this way is completed into lithium hydroxide, the final form used in batteries, through the 'lower process' factories being built near Gwangyang, Korea, and Salta City.

The name of POSCO's Argentina lithium project, 'Sal de Oro Plant' (Sal de Oro Plant in Spanish, meaning 'Golden Salt' factory)

12,000 tons lithium production system by 2030... Extracting 'white oil' from the opposite side of the globe

POSCO Holdings started construction of the first-phase lithium plant based on the Hombre Muerto salt lake in March, and in October reported and received approval for the second-phase investment project from the board of directors. With the implementation of the U.S. Inflation Reduction Act (IRA) and active investment by global battery companies in North America, POSCO decided to advance the second-phase project planned for next year to actively respond to domestic and international customers' requests for expanded lithium supply.

The first-phase lithium plant aims to complete construction in the first half of 2024 with an annual production capacity of 25,000 tons of lithium hydroxide. The total investment, including infrastructure and working capital, is about 830 million USD (approximately 950 billion KRW). The second-phase project involves building facilities to produce 25,000 tons of lithium hydroxide annually, with an investment of about 1.09 billion USD (approximately 1.5 trillion KRW). First, a lithium carbonate production plant will be constructed at the salt lake by the end of this year, and the process to convert lithium carbonate into lithium hydroxide used in final battery manufacturing will begin construction domestically in the first half of next year and complete in the second half of 2025.

POSCO Holdings plans to accelerate the third and fourth-phase investments after 2025 to achieve an annual lithium production system of 120,000 tons from brine lithium early. Along with brine lithium, ore lithium and recycled lithium from used batteries will be combined to complete an annual lithium production system of 300,000 tons by 2030, aiming to become a global top 3 lithium producer.

Even from Salta City, the nearest city with an airport, it is 170 km away, requiring a 30-minute flight by small aircraft. Deputy General Manager Oh said, "When the demo plant was launched in 2019, there were no accommodations or equipment, so it took 8 hours to move heavy equipment, and we had to live in camping cars," adding, "Now, there are accommodations for hundreds of people, as well as restaurants, gyms, and medical facilities." He also said, "To operate the first-phase lithium plant where full-scale lithium production will take place, ponds covering 500 hectares (1.9 times the size of Yeouido) are being constructed," and "lodging facilities for 200 plant workers and facilities for 1,000 construction workers are also being built."

Why 4,000m altitude and Argentina on the opposite side of the globe?

Argentina, Chile, and Bolivia are called the 'Lithium Triangle,' containing more than half of the world's lithium reserves. Lithium, a light metal, has continuously flowed into underground brine from the volcanic Andes Mountains and accumulated over hundreds of thousands of years. This region is also advantageous for installing ponds that increase lithium concentration through drying. Located near the equator, the area has a consistently dry climate.

Deputy General Manager Oh said, "Although there is ore mining, lithium extracted from brine is attractive because it is easier to synthesize with nickel, another key battery material, and the extraction process produces fewer harmful gases."

In August 2018, POSCO Group signed a contract to acquire a 17,500-hectare salt lake in Argentina from Australian resource development specialist Galaxy Resources (now Alkem) for 280 million USD (about 330 billion KRW at the time), and finalized the mining rights acquisition in February 2019.

The salt lake acquired by POSCO Group is the northern part of the Hombre Muerto lake in northwestern Argentina. After acquisition, POSCO expanded its mining rights by securing additional nearby rights, increasing the total mining rights area to 25,500 hectares, about 30 times the size of Yeouido.

The lithium concentration was also confirmed to be high, averaging 921 mg per liter, making it the highest in both lithium reserves and concentration among salt lakes worldwide. Lithium concentration is an indicator of the amount of lithium dissolved per liter of brine; the higher the concentration, the more lithium can be extracted from less brine.

After acquiring the salt lake, the global brine lithium consulting firm Montgomery & Associates from the U.S. conducted exploration work for about two years based on internationally accredited standards to verify reserves. They confirmed that the lithium reserves of the salt lake are 13.5 million tons of lithium carbonate, six times the initial estimate of 2.2 million tons at acquisition. It was expected to produce 25,000 tons of lithium hydroxide annually for about 20 years, but now it can sustainably produce 100,000 tons of lithium hydroxide for over 30 years.