POSCO eyes more Australian raw materials for EV anodes, cathodes

Pilbara Minerals' Pilgangoora lithium-tantalum project in Western Australia. POSCO will source raw materials from Pilbara to feed its lithium-ion battery material expansion plans. Source: Pilbara Minerals

POSCO plans to increase its investments in Australian lithium and nickel projects to make more lithium-ion battery materials amid an expected surge in demand from electric-vehicle makers.

Australian mines can supply the core raw materials needed for the company's plans to expand in-house capacity for its materials business and set up an integrated value chain for lithium-ion battery materials, said Kaehee Oh, head of POSCO's lithium-ion battery materials business strategy group.

"If we can combine the natural resources of Australia with the manufacturing competitiveness of POSCO, we will surely achieve strong synergies in the value chain," Oh said through a translator at the Oct. 28 joint meeting between the Australia-Korea Business Council and the Korea-Australia Business Council, held online and in Seoul.

Pointing to the EV battery production targets of Tesla Inc., General Motors Co. and other car manufacturers, Oh said requests for lithium-ion battery materials are likely to continue based on growing demand, with cathode and anode demand set to increase at a compound annual rate of 23% through 2030.

"Most major EV makers are already automotive steel customers of POSCO," Oh noted. "By integrating POSCO's manufacturing capacity with Australia's resources ... we'll be able to build the most competitive raw material platforms for lithium-ion batteries."

POSCO plans to boost cathode capacity to 415,000 tonnes by 2030 by expanding sites in the U.S. and Europe through in-house production of high-purity nickel and battery-grade lithium. To support this, the steelmaker is looking to expand its lithium capacity from 45,000 tonnes currently to 220,000 tonnes and its nickel capacity from 20,000 tonnes in 2023 to 140,000 tonnes by 2030.

The company also wants to produce 260,000 tonnes of anodes by 2030, supported by in-house production capacity for 210,000 tonnes of flake graphite and 75,000 tonnes of spherical graphite.

Australia crucial to POSCO's capacity expansion

"For us, cooperation with Australia is considered very critical," Oh said. "POSCO is mobilizing multiple ways to secure raw materials such as in-house production, off-take investment and technology alliances."

In 2018, POSCO secured equity in West Australian lithium producer Pilbara Minerals Ltd. Earlier this month, Pilbara took an initial 18% in a new joint venture with POSCO to develop and operate a 43,000-tonne-per-year lithium hydroxide monohydrate conversion facility in Gwangyang, Korea.

"We hope to gradually expand the partnership with Pilbara Minerals for lithium resources, and are also planning to participate in new lithium projects that Australia has to offer to continue to secure lithium supply for additional capacity expansions of lithium hydroxide," Oh said.

"POSCO is also expanding its equity investment in other environmentally friendly nickel projects all over Australia to secure more nickel resources," Oh said.

POSCO acquired a 30% stake in the West Australian Ravensthorpe nickel-cobalt project in May for $240 million. It also secured a long-term off-take agreement with the mine starting in 2024.

The company, along with Korean battery maker LG Energy Solution Ltd., also took equity in Queensland Pacific Metals Ltd. in June to fund the development of the TECH nickel-cobalt project in Queensland.

In addition, the South Korean steelmaker is securing graphite for battery anodes. Earlier this year, POSCO inked a nonbinding off-take agreement for graphite from Renascor Resources Ltd.'s South Australian Siviour project and acquired equity in Tanzania-focused Australian graphite company Black Rock Mining Ltd. with the intention of negotiating an off-take and prepayment agreement for flake graphite.

"For the stable growth of POSCO's natural graphite cathode business, securing supply of the graphite Australia has would be most critical," Oh said.