POSCO Group Completes Supply System from Mines to Lithium and Cathode Materials

POSCO Future M-Philbara Lithium Solution, Supply Contract
Securing US FEOC Exception Supply Chain... Strengthening Market Competitiveness

POSCO Future M has signed a supply contract for 20,000 tons per year of lithium hydroxide with POSCO Pilbara Lithium Solutions. By securing a large volume of domestically produced lithium that does not violate the U.S. Foreign Entity of Concern (FEOC) regulations, it has significantly enhanced its competitiveness in the U.S. market.

With this contract, POSCO Group has completed an integrated supply system from mines to lithium hydroxide and cathode materials.

On the 6th, POSCO Future M and POSCO Pilbara Lithium Solutions announced that they signed a purchase and supply contract on the 5th for 20,000 tons of lithium hydroxide for cathode material manufacturing. This amount can produce 43,000 tons of cathode material, sufficient to supply 460,000 electric vehicles.

This lithium hydroxide is mass-produced by POSCO Pilbara Lithium Solutions using lithium concentrate from the Pilganguara mine in Australia, in which POSCO Holdings holds a 4.75% stake. It is entirely used for producing cathode materials for export to the U.S.

In 2021, POSCO Holdings jointly established POSCO Pilbara Lithium Solutions, a lithium hydroxide manufacturer in Gwangyang, with Australian mining development company Pilbara Minerals. On the 29th of last month, the second plant was completed, establishing an annual production system of 43,000 tons of lithium hydroxide.

Through this contract, POSCO Future M will be able to stably procure lithium hydroxide via the FEOC-exempt supply chain, securing differentiated competitiveness in the U.S. market.

According to the U.S. Inflation Reduction Act (IRA), from 2025, tax credits will be excluded if minerals mined or processed in countries designated as FEOC by the U.S., such as China, are used. For electric vehicle batteries sold in the U.S., establishing a supply chain outside of FEOC is essential.

POSCO Future M plans to gradually increase its purchase volume from POSCO Pilbara Lithium Solutions as sales in the U.S. market are expected to grow.

Meanwhile, POSCO Group, which has been promoting its secondary battery materials business since 2010, will be able to further strengthen synergies within the group’s secondary battery materials business. Currently, the group’s secondary battery material companies are consecutively establishing mass production systems. Based on a stable supply chain within the group?including POSCO Pilbara Lithium Solutions, POSCO Lithium Solutions which uses Argentine brine as raw material, nickel specialist SNNC, and POSCO HY Clean Metal which extracts raw materials from used batteries?POSCO Future M is expected to gain a competitive edge in raw material procurement compared to competitors.