South Korean steelmaker POSCO Holdings (KRX: 005490) has taken full ownership of a lithium mining asset in Argentina, advancing its push into battery materials.
The company said Thursday it acquired a 100 per cent stake in a local subsidiary of Lithium South Development Corp. (CVE: LIS) (OTCMKTS: LISMF) for USD$65 million. The subsidiary holds rights to the Hombre Muerto North salt lake project.
Additionally, POSCO stated the asset contains an estimated 1.58 million tonnes of lithium resources. The purchase lifts its total Argentine holdings to roughly 15 million tonnes.
Consequently, the company expects to extract at least 3 million tonnes from those resources. That volume could support battery production for approximately 70 million electric vehicles.
A company representative said the added resources will improve flexibility in responding to global market shifts. The firm also aims to strengthen its supply chain competitiveness as demand evolves.
Meanwhile, POSCO has continued to expand its energy materials division beyond traditional steelmaking. In November 2025, it committed 1.1 trillion won toward lithium projects in Argentina and Australia.
Furthermore, management has positioned lithium as a central pillar of future growth. The strategy reflects rising long-term demand expectations tied to electric vehicle adoption.
However, the acquisition comes during a period of oversupply in the global lithium market. Prices have fallen sharply over the past year as new supply outpaced demand growth.
Additionally, major producers in Australia, Chile and China have increased output aggressively. This expansion has created a near-term glut, pressuring margins across the sector.
Consequently, benchmark lithium carbonate prices have dropped from prior highs above USD$70,000 per tonne to lower levels. Analysts describe the market as temporarily saturated.
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Global supply glut slows electric vehicle targets
In addition, slower electric vehicle sales growth in key markets has contributed to the imbalance. Automakers have moderated production targets, reducing immediate lithium demand.
However, many companies continue to invest through the downturn. Producers expect supply and demand to rebalance later this decade as EV adoption accelerates again.
Meanwhile, Lithium South Development has focused on advancing its Hombre Muerto North project in Argentina’s lithium-rich Salta province. The company has completed resource estimates and preliminary development planning.
Additionally, the project sits within the broader Hombre Muerto salar, one of the world’s most established lithium-producing regions. Several major operators already extract lithium brine nearby.
Furthermore, Lithium South has emphasized relatively low impurity levels in its brine, which can simplify processing. That feature has drawn interest from larger strategic buyers.
Consequently, POSCO gains access to a project with existing geological data and development groundwork. The acquisition allows it to integrate upstream lithium supply into its battery materials chain.
In addition, the move aligns with broader industry trends toward vertical integration. Companies increasingly seek direct control over raw materials to reduce supply risk.
However, near-term returns may remain constrained while lithium prices stay under pressure. Producers must balance long-term positioning against current market conditions.
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