On March 18, Pilbara Minerals Limited (Pilbara Mineral), an Australian lithium and tantalum producer, announced that Pilbara will establish a joint venture with South Korea's Posco to produce lithium battery anode materials in South Korea, with Pilbara holding a maximum of 30%. This project combines the raw material advantages of spodumene ore suppliers with the “PosLX” purification technology developed by Posco, and aims to achieve an annual production capacity of 40,000 tons of lithium hydroxide and lithium carbonate.
"We are proud of our relationship with POSCO last year, and it continues to grow as we continue to go through the joint venture development process. Seeing due diligence work to date has emerged," said Ken Brinsden, managing director and CEO of Pilbara Minerals. The positive results are really pleasing.
POSCO has made significant investments in its PosLX technology and has proven their ability to produce industry-leading battery-ready lithium products through an innovative lithium purification process. He believes that it is not easy for Pilbara Minerals to have a strong and technically competent partner like POSCO, which has given the company a chance to work with them to enter the battery grade and cathode material product supply market and become completely complete. An exciting opportunity for vertically integrated global lithium raw materials companies. The rapid growth of lithium chemical consumption in South Korea cannot be underestimated, and Pilbara believes this partnership puts Pilbara Mining at the forefront of this emerging market, according to Benchmark Minerals Intelligence (October 2018) predicts that South Korean battery manufacturers will supply 25% of global production capacity by 2028.
It is reported that the plant is located in the Gwangyang Free Economic Zone, South Korea, has a capacity of up to 40,000 tons of lithium carbonate, and uses POSCO's patented PosLX purification process to process hectorite from the Pilgangoora lithium tantalum project (Pilgangoora project). Since the fourth quarter of 2018, Pilbara Minerals has been conducting technical due diligence to evaluate the proposed chemical plant development, and the work to date has yielded promising results. Due diligence includes visits by technicians and assessments of POSCO's existing commercial operations plants, using their PosLX technology, and spodumene delivered based on Pilbora Minerals' Pilgangoora project.
POSCO developed their first commercial-scale operation (after the initial development of a pilot-scale plant) to produce up to 2,500 tons of lithium chemicals based on lithium carbonate equivalents. Based on the chemical conversion of spodumene, the plant has the ability and flexibility to produce advanced lithium hydroxide or alternating lithium carbonate products (ie, the plant has dual-use capabilities) with low impurities in the final product produced. To date, the battery-grade lithium hydroxide produced has been tested by major Korean cathode manufacturers and has passed its certification process. With PosLX technology, POSCO has proven the production of high-purity lithium hydroxide and is expected to be highly sought after by Korean battery manufacturers.
Studies conducted by POSCO have determined that the capital development costs of the proposed chemical conversion and purification facilities are generally consistent with lithium chemical facilities recently established / constructed and operated elsewhere. Operating costs for chemical conversion and purification are also expected to meet industry standards for high-purity products produced. Before Pilbara Minerals' board of directors makes a final investment decision on its full participation in DJV, there are still some outstanding conditions to be met. These conditions include completion of further due diligence on the proposed chemical conversion plant, finalization of financing and eventual binding of the joint venture, and technology licensing terms that are in line with key business principles previously agreed by both parties.