[Report] POSCO Dives into Argentine Golden Salt... The Reason Behind the 10 Trillion Won Annual Lithium Boom

POSCO Holdings, Argentina
Ombre Muerto Salt Lake
First Domestic Company Mining and Refining Plant
Annual Production System of 100,000 Tons by 2030

Lithium Over 100 Million KRW per Ton
100,000 Tons Sustained Production for Over 30 Years
Cumulative Scale of 290 Trillion KRW

Jaehun Oh, Deputy General Manager of DP Production Technology at POSCO Argentina, is explaining the 'pond' within the lithium production process located at Hombre Muerto Salt Lake in Argentina.

[Asia Economy (Salta, Argentina) = Reporter Jeong Dong-hoon] ‘Sal de Oro Plant’ (Sal de Oro Plant, Spanish for ‘Golden Salt’ factory)

is the name of POSCO Holdings’ lithium salt lake project in Argentina. On the 12th (local time), the Ombre Muerto salt lake in Salta Province, northwest Argentina, which we visited, is located at an altitude of 4,000 meters where even breathing is difficult. Here, a demonstration 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 on this plateau to produce 100,000 tons of lithium by 2030 and produce lithium, the fundamental mineral of the battery supply chain, using Korean technology. In the remote highland area of Argentina, 20,000 km one-way from Incheon Airport in Korea, with a flight time of over 25 hours, POSCO has created a milestone for producing ‘Korean-style lithium.’

The Ombre Muerto salt lake was located in the vast and beautiful ‘Puna’ (high plateau plain). Despite the beautiful scenery, it was not suitable for human habitation. Breathing became short and dizziness occurred when walking even slightly faster or on a slope. Some members of the press 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, a drying process proceeds in four stages in ‘ponds,’ similar to salt fields where seawater is evaporated to produce salt. Jaehoon Oh, General Manager of DP Production Technology at POSCO Argentina, who was in charge of the briefing on site, said, “Increasing the concentration by pumping the salt lake water is an important process,” adding, “The northeastern area of the Ombre Muerto salt lake purchased by POSCO is among the highest lithium content areas in Argentina.”

The concentrated brine from the four-stage pond drying process 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 in this way is completed in the form of lithium hydroxide, the final form used in batteries, through the ‘lower process’ factories under construction near Gwangyang, Korea, and Salta City.

Lithium phosphate produced at POSCO Argentina lithium production plant.

POSCO Holdings is accelerating the ‘lithium clock’ in response to the implementation of the U.S. Inflation Reduction Act (IRA). The IRA, which provides massive subsidies to companies and consumers, is expected to trigger explosive growth in the electric vehicle market centered in North America. Following stable pilot production at the demonstration plant, POSCO started construction of the first-phase lithium plant based on the Ombre Muerto salt lake in March this year and plans to begin construction of the second-phase plant by the end of this month. Each phase will establish a production system of 25,000 tons of lithium hydroxide, and when the four-phase project is completed, a 100,000-ton lithium production system will be established. Considering the current lithium price of about 100 million KRW per ton, this corresponds to an annual lithium production worth about 10 trillion KRW.

Posco Argentina lithium project phase 1 superstructure construction site in Salta region, Argentina. Photo by Posco Holdings

POSCO Group signed a contract in August 2018, shortly after Chairman Choi Jung-woo’s inauguration, to acquire a 17,500-hectare salt lake in Argentina from Australian resource development specialist Galaxy Resources (now Alchem) for 280 million USD (about 330 billion KRW at the time). A POSCO Argentina official stated, “At the time of acquiring the salt lake, POSCO initiated negotiations for the sale of mining rights by contacting Galaxy, the seller of the salt lake mining rights, individually and confidentially, and was able to start negotiations by persuading the Galaxy Resources management, who initially had no intention to sell.” After acquisition, POSCO Group expanded its mining rights area to 25,500 hectares, about 30 times the size of Yeouido, by securing additional nearby mining rights. It confirmed that the lithium reserves of the salt lake are 13.5 million tons of lithium carbonate, six times the 2.2 million tons estimated at the time of acquisition. It was expected to produce 25,000 tons of lithium hydroxide annually for about 20 years, but this has increased significantly, enabling continuous production of 100,000 tons of lithium hydroxide for over 30 years. Converted to current prices, this corresponds to cumulative lithium production worth 290 trillion KRW.