POSCO Holdings (KRX: 005490) is entering the lithium market in Alberta, Canada, where it will conduct exploration and development activities for lithium and other minerals found in oil-field brine.
On Wednesday, the South Korean company announced that it signed a memorandum of understanding (MOU) with Invest Alberta Corporation (IAC) in Seoul.
The company will identify mining locations, evaluate investment opportunities and confirm a viable commercial process for lithium extraction. Invest Alberta Corporation’s contributions include offering administrative support, critical resource development information, tax incentives and networking opportunities with potential business partners to facilitate the project’s success.
Despite having a lower lithium concentration compared to conventional sources, the extensive reserves in the North American region offer a new and promising avenue for sourcing lithium.
Corporations worldwide are exploring methods like direct lithium extraction (DLE) to tap into these reserves found in depleted oil fields.
With this MOU, POSCO Holdings aims to expand its raw material supply chain to include not only traditional brine and ore lithium but also clay and oil-field brine.
This move positions the company to take advantage of the US Inflation Reduction Act (IRA) and establish a valuable presence in the North American lithium market.
Read more: Lithium South Development first production well installed at Hombre Muerto lithium project
Read more: Lithium South Development expands production goals, updates PEA on Hombre Muerto lithium project
POSCO Holdings has a strong foothold in Argentina
Prior to the proposed deal in Alberta, POSCO has made sufficient inroads into lithium deposits in Argentina. Argentina, Chile and Bolivia comprise the lithium dense region known as the lithium triangle.
Specifically, POSCO’s comprehensive lithium project is situated in the Salar del Hombre Muerto region, which spans between the provinces of Salta and Catamarca in Argentina.
In 2018, POSCO actively expanded its lithium footprint by acquiring brine tenements in Argentina. The company is constructing commercial brine lithium plants in the region with a total capacity of 50,000 tonnes per year.
POSCO developed an extraction technology for lithium in 2010 and started production after producing a feasibility study.
A pilot plant was manufactured in South Korea in 2017 with a capacity of 2,500 tons / year of lithium, then it was brought and installed in Argentinian.
The following year, Posco Argentina opened in Salta and later in Catamarca.
The company is currently in an exploration stage and expects to have its commercial plant completed by the end of 2023.
POSCO’s properties in the Salta province share borders with some of the largest companies in the world, including Livent Corporation (NYSE: LTHM). Additionally, POSCO’s USD$840 million lithium plant is adjacent to Lithium South Development Company‘s (TSXV: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) Hombre Muerto North property. Lithium South increased its lithium resource by 175 per cent in 2023.
With a strong foothold in Argentina and a promising venture in Alberta, the company is poised to play a significant role in meeting the growing demand for lithium in North America and beyond.
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Lithium South Development Corporation is a sponsor of Mugglehead news coverage
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