South Korea’s leading steelmaker Posco aims to complete building its lithium manufacturing plant in Argentina sooner than its initial plan as a move to take the lead in the lithium market that is poised to surge following a rapid growth in demand for electric vehicles (EVs) across the world.

Posco said on Sunday that the company is shortening the construction period for its lithium production plant in Argentina by moving up the completion date to September this year from the initial target of the end-year. The company broke ground for the facility in February this year with an aim to build a plant with an annual production capacity of 2,500-ton lithium that is equivalent to powering up about 60,000 EVs.

But the company decided to speed up the construction, actively responding to the recent surge in demand for lithium that is a core material for a rechargeable battery for EVs. The price of lithium is also on the sharp rise. Posco also plans to start to expand its manufacturing facility that could churn out 40,000 tons of lithium annually, a level that can to power about 1 million units of EVs in 2017, said an unnamed Posco official.

The Korean steelmaker has been accelerating the growth of its lithium business after it recently succeeded in developing its own cutting-edge lithium extracting technology. Lithium consumption has skyrocketed in the world following a boom in electric cars, which has triggered the lithium price to hike. The price of lithium carbonate for EV secondary batteries in China, the world’s largest EV market, jumped from $7,600 per ton at the end of 2014 to $10,800 per ton in Oct. 2015, to $12,800 per ton in Nov. 2015, and then to $20,000 per ton in Feb. 2016. The lithium carbonate price has surged 56 percent in just three months.

Previously, the demand for lithium was mainly led by IT and mobile devices, but the sharp growth in the EV and energy storage system (ESS) markets recently is the main driver of the increase in demand for lithium. Import of lithium carbonate to Korea has three folded to 14,981 tons in 2014 from five years ago.

Posco’s lithium plant in Argentina that could ensure a steady supply of lithium is expected to pave the way for Korea to take the lead in developing key EV technologies. Posco was able to come up with the new lithium production technology in cooperation with Research Institute of Industrial Science and Technology (RIST). Posco Chairman Kwon Oh-joon who served as the president of RIST from 2009 to 2011 spearheaded the project developing and commercializing the lithium carbonate production technology. And more supports are expected to be put on the lithium business as Chairman Kwon himself led the research and development.

By Park Yong-beom

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