Sector News

South Korea’s POSCO drops plans for Chilean battery material plant

June 24, 2019
Energy & Chemical Value Chain

South Korea’s POSCO has pulled out of a project to build battery parts in Chile, the Asian steelmaker said, little more than a year after winning guaranteed access to cheap lithium from top producer Albemarle.

POSCO, together with partner Samsung SDI, won a 2018 Chilean government tender to build a battery-parts factory in the country’s northern desert in exchange for a 27-year supply of low-cost lithium.

The problem, POSCO told Reuters, is that the project it proposed requires lithium hydroxide, a type of the metal increasingly favored by EV battery makers but one not produced by Albemarle in Chile.

Albemarle in Chile produces primarily lithium carbonate, a variety of the metal that is widely used in smaller consumer electronics.

Samsung, the world’s largest maker of smartphones, told Reuters that it is still reviewing the project following Posco’s announcement.

POSCO’s decision is yet another in a string of setbacks for Chile, which has struggled to modernize its lithium policies, boost output and develop a domestic battery industry, despite having the world’s largest supplies of the metal and rising global EV demand.

Albemarle and the Chilean government in 2016 signed an agreement that allows Albemarle to more than triple its output of lithium. But the deal requires the company reserve as much as 25 percent of its production for companies seeking to build batteries or their parts in Chile. The agreement does not specify whether Albemarle should produce lithium carbonate or lithium hydroxide at its facilities.

Albemarle and Corfo, which leases the company its mining rights in Chile, initially disagreed on how to price the lithium it would provide to the battery makers, but have since come to agreement. Neither has offered details of the settlement.

Albemarle did not immediately respond to requests for comment on Posco’s decision.

China’s Sichuan Fulin Transportation Group Co and Chile’s privately held Molymet also won access to the discounted lithium in last year’s tender.

Fulin and Molymet did not immediately respond to requests for comment.

Following last year’s tender, Chile’s government said the price tag for the three projects was $754 million. At least 664 jobs would be created.

The deals were widely seen as a foot in the door into Chile as countries and global corporations scramble to lock down supplies of key metals used in batteries that power cell phones, tablets and electric vehicles.

POSCO last summer said it would build a lithium plant in Argentina to help secure its own supply. That announcement came as POSCO also said it would buy lithium mining rights in Argentina from Galaxy Resource Ltd’s in a deal worth $280 million.

By Dave Sherwood and Jane Chung

Source: Reuters

comments closed

Related News

April 20, 2024

Borealis makes multi-million investment in Finnish cracker furnaces

Energy & Chemical Value Chain

The investment enables the steam cracker to increase the share of renewable and recycled raw materials used in its (ethylene and propylene) production. The move supports the Borealis Strategy 2030 for a circular economy. The Porvoo investment program is expected to be completed in 2025.

April 20, 2024

BP cuts down leadership team to ten members

Energy & Chemical Value Chain

Murray Auchincloss, bp’s CEO, said in a statement: “As I set out in February, BP’s destination from IOC [international oil company] to IEC [integrated energy company] is unchanged – and we need to deliver as a simpler, more focused, and higher-value company.

April 20, 2024

Versalis buys Italian compounder Tecnofilm

Energy & Chemical Value Chain

Founded in 1972, Tecnofilm has expanded its product portfolio over the years to offer a wider range of compounds and functional polymers for various industrial applications and technical articles. The company has patented several of its products.

How can we help you?

We're easy to reach