Pilbara Minerals Ltd. said March 18 that it conditionally exercised an option for a joint venture with POSCO to develop a downstream lithium chemical conversion facility in the Gwangyang Free Economic Zone in South Korea.

POSCO will hold a 70% interest in the joint venture, and Pilbara Minerals will hold 30%.

The Australia-listed miner had signed a nonbinding memorandum of understanding with POSCO to consider a larger jointly owned chemical conversion facility in South Korea.

The facility is rated to process 40,000 tonnes per annum of lithium carbonate equivalent. It will source spodumene from the miner's Pilgangoora lithium-tantalum project in Western Australia and use POSCO's proprietary PosLX purification process.

It is expected to become the first large-scale chemical conversion plant in the country to deliver battery-ready lithium chemicals to the battery-materials sector in South Korea.

Pilbara Minerals will make a final investment decision and commitment to the joint development in mid- to late May after satisfying outstanding conditions, including completing further due diligence on the chemical conversion plant, financing, and finalizing the final binding joint venture and technology licensing terms.

The company aims to finish building the chemical conversion plant in late 2020 and start ramp-up and production in early 2021.