[Exclusive] POSCO Jang In-hwa Administration, No Retreat on Battery Materials... Lithium Business Expansion in the US

[Bojo, Battery]
Geothermal Power Combined Lithium Extraction Project Near Salton Sea, California

Ombre Muerto Salt Lake in Argentina, where POSCO Holdings constructed a lithium production process. Jaehoon Oh, Head of DP Production Technology at POSCO Argentina, is explaining the pond (artificial lake) within the salt lake on-site in December 2022. Photo by Donghoon Jung

POSCO Group is advancing a lithium extraction project in California, USA. This marks the first battery raw material investment since Jang In-hwa assumed the chairmanship of POSCO Holdings. The company is boldly investing despite concerns about a slowdown in electric vehicle demand leading to a cautious approach in battery material development. Lithium produced in the US is also expected to contribute to stabilizing the local supply chain.

Is Jang In-hwa's First Battery Raw Material Investment Underway?

According to industry sources on the 29th, POSCO Holdings is pushing forward with a lithium extraction project near Salton Sea in Imperial County, California. POSCO Holdings plans to utilize geothermal power in the area to extract lithium using an eco-friendly method.

Salton Sea is called a sea rather than a lake locally due to its high salinity and its area of 974 km². According to an analysis by Lawrence Berkeley National Laboratory, disclosed by the US Department of Energy, the lithium reserves beneath Salton Sea amount to 18 million tons. This is more than the lithium reserves in Chile (11 million tons), which is known for its abundant lithium deposits. This amount is sufficient to produce batteries for over 300 million electric vehicles. Considering the current lithium price (based on lithium carbonate) is about $15,000 per ton (approximately 20.65 million KRW), 18 million tons of lithium is valued at over $270 billion (approximately 372 trillion KRW). Globally recognized companies such as General Motors (GM) and Berkshire Energy, an energy company under Warren Buffett's Berkshire Hathaway, are conducting lithium exploration and development activities in the area.

POSCO Group has also been eyeing development projects in the US, seeing it as an opportunity to support both production and demand. Near Salton Sea is an active volcano called Salton Buttes. Beneath it, a magma layer is actively moving, with groundwater flowing above it. Lithium and other elements dissolved in the magma flow into this groundwater, forming 'geothermal brine.' Geothermal brine refers to ultra-hot brine containing a mixture of many minerals and metals. The lithium concentration in this geothermal brine is 200?300 ppm, which is lower than the brine concentration of conventional commercial salt lakes (800?1000 ppm).

Due to the high temperature, when geothermal brine reaches the surface, moisture turns into steam and evaporates into the air, increasing the lithium concentration. This geothermal brine is at a temperature above 250 degrees Celsius. It not only enables lithium extraction but also supports eco-friendly power generation through geothermal energy. This power is then used again for lithium extraction, enabling an environmentally friendly process. POSCO Holdings is envisioning extracting lithium in cooperation with a local company operating a geothermal power plant in the area.

Why Did POSCO Group Choose US Geothermal Brine Lithium?

In particular, POSCO Holdings is focusing on developing unconventional technology to extract lithium from geothermal brine. Traditionally, lithium, a core battery material, has been mainly extracted from ores. While these have high concentrations and are easier to commercialize, securing new sources has become increasingly difficult.

Accordingly, the development scope is expanding to include clay and oilfield brine. Unconventional lithium has lower grade (useful element content), requiring advanced extraction technology. As the value of lithium as a key battery raw material rises and extraction technology advances, the commercialization timeline for unconventional methods is also accelerating.

The next-generation technology capable of extracting lithium from low-concentration sources is 'Direct Lithium Extraction (DLE).' This technology uses the chemical properties of lithium to adsorb lithium ions or filter them through ion separation methods, extracting only lithium elements. Compared to traditional lithium extraction methods, DLE can extract lithium from water with many impurities using smaller-scale plants. It can also reduce the lithium concentration process, which used to take several months, to just a few hours. POSCO Holdings has accumulated lithium extraction technology and business capabilities through projects involving Argentine brine lithium and Australian ore lithium, and has also built up DLE technology expertise.

Jang In-hwa, Chairman of POSCO Holdings. Photo by POSCO Holdings

The Salton Sea lithium project is expected to accelerate POSCO Holdings' expansion of its supply chain in the North American market. In addition, POSCO is developing clay lithium at the border of Oregon and Nevada in the US with Jindari Resources, an Australian mineral exploration and development specialist. In Canada, POSCO has partnered with the Alberta Investment Office to secure oilfield brine lithium. Oilfield brine is water found around geological layers where oil is deposited.

This is also interpreted as a long-term commitment to expanding the battery material business. Jang In-hwa, chairman of POSCO Holdings, emphasized in his first statement after taking office, "The battery material business is the best new business of POSCO Group," and added, "Investments should be made timely and at an appropriate scale, but we will never be passive." If this project materializes, it will be Chairman Jang's first investment in battery raw materials. POSCO Holdings recently announced in its first-quarter conference call that it would postpone battery material investment plans compared to previous schedules. However, the company stated that this production cutback is only a partial adjustment due to the slowdown in electric vehicle demand and not a retreat.

Regarding the Salton Sea project, POSCO Holdings stated, "We are reviewing technical cooperation with local companies, but no specific details regarding commercialization have been decided."