By Kim Da-ye
POSCO Chairman Chung Joon-yang signed a preliminary deal with a Peruvian firm owning a lithium-rich salt lake in Chile Saturday to jointly develop the key metal for rechargeable batteries.
The agreement allows POSCO’s Research Institute of Industrial Science & Technology (RIST) to build a plant in Chile with the success of a pilot plant for lithium extraction and for POSCO to acquire a share of Li3 Energy, the Peruvian partner, by August after due diligence.
Li3 Energy, a natural-resources developer, owns a 60 percent share of the salt lake of Maricunga in Atacama, Chile. The lake is estimated to contain 1.2 million tons of lithium carbonate.
Drilling would begin in the second half this year and production could start as early as 2013, POSCO said in a statement.
“POSCO is focusing on developing technology for extracting lithium and securing lithium reserves because the firm aims to become a comprehensive material company,” the statement said.
Lithium is a light, highly electrochemical metal used in batteries for mobile phones as well as electric vehicles. Some 90 percent of lithium resources are believed to be buried in South America where Korean firms and their Japanese counterparts are in intense competition for securing the metal. Last year the Korean government picked lithium as a new strategic mineral.
POSCO forecasts the global consumption of lithium would grow 20 folds in 40 years to 2 million tons and aims to set up a research facility in April for lithium extraction with the Ministry of Land, Transport and Marine Affairs.
The preliminary deal with Li3 Energy came during Chung’s trip to Chile, Honduras and Ecuador in active attempts to seek business opportunities in South America.
On May 4, Chung signed a memorandum of understanding (MOU) with Honduran President Porfirio Lobo Sosa securing the firm’s investment in building infrastructure and urban development.
POSCO said that it hopes to participate in constructing business districts and developing natural resources there.
On the 5th, Chung visited Ecuadorian construction company Santos CMI to celebrate the new addition to the “POSCO family.” POSCO Engineering & Construction (E&C) together with Daewoo Engineering acquired a 70 percent stake in it last February.
POSCO said Santos finished 130 projects in 18 countries in the last three decades, and was chosen as one of the top international contractors by U.S. magazine Engineering News Record.