POSCO acquires stake in Pilbara

South Korean industrial group POSCO has completed the acquisition of a 4.75pc stake in Australian hard rock lithium producer Pilbara Minerals.

The company will now consider the feasibility of establishing a joint venture to convert concentrate to lithium hydroxide or carbonate in South Korea.

POSCO paid A$80mn ($60.8mn) for its strategic shareholding in Pilbara. It is committed to buying 80,000 t/yr of lithium concentrate from Stage 2 of Pilbara's Pilgangoora project. This could gradually rise to 240,000 t/yr if the two companies establish a 30,000 t/yr downstream joint venture in South Korea.

Pilbara expects to produce first concentrate from Stage 1 of Pilgangoora in the June quarter of this year. It is still completing a feasibility study on increasing Stage 2 to a 5mn t/yr ore processing operation.

Funds received from POSCO will go towards funding Stage 2 development which is estimated to cost A$207mn. Other strategic offtake partners China's Ganfeng Lithium and Great Wall Motors will be contributing A$65mn and A$50mn respectively towards development costs.

Pilgangoora Stage 1 will produce at a rate of 350,000 t/yr of lithium concentrate, while Stage 2 is estimated to take total production to around 800,000 t/yr of concentrate.

Hard rock lithium can be converted directly into lithium hydroxide or lithium carbonate. Lithium brine first has to be converted to lithium carbonate before it can be converted into lithium hydroxide. Hydroxide-based batteries require less cobalt, which is in short supply, and more nickel, which is easier to source.

POSCO has developed its own proprietary PosLX extraction technology which manufactures high grade lithium hydroxide or carbonate for the battery industry from hard rock lithium concentrate.