POSCO signs $240 mln deal to acquire 30% stake in Australian nickel mining company

By Lim Chang-won Posted : May 20, 2021, 16:11 Updated : May 20, 2021, 17:43

[Courtesy of POSCO]

SEOUL -- South Korea's steel group POSCO has strengthened its status as the supplier of key materials for electric vehicle batteries by acquiring a 30 percent stake in a nickel mining and smelting company in Australia for $240 million.

POSCO said in a statement on May 20 that under a deal with Canada's First Quantum Minerals, the steel group would receive 7,500 tons of nickel in mixed hydroxide precipitate (MHP) per year, beginning in 2024. MHP consists of mostly nickel hydroxide but also contains valuable cobalt hydroxides and various other impurities.

The steel group said it would seek additional business opportunities related to battery materials through a separate deal with First Quantum Minerals to expand cooperation in nickel sulfate. Through the acquisition of the Australian company, POSCO said it would strengthen its status as the supplier of key materials for batteries such as lithium, nickel, and graphite.

POSCO will build a dedicated factory in the southern industrial port city of Gwangyang by 2023 to manufacture 43,000 tons of rare metal annually using extraction technology to collect lithium from ores imported from Australia.

The steel group regards battery materials as its next growth engine. In December 2020, POSCO chairman Choi Jeong-woo presented the goal of becoming a top player in the global battery material market by speeding up the completion of a value chain to produce some 220,000 tons of lithium and 100,000 tons of nickel by 2030. It targets a global market share of 20 percent.

Posco Chemical, a leading company in coal chemistry and carbon materials, has spearheaded the steel group's strategy to produce high-purity nickel and develop materials for batteries. The company has secured a three-year contract worth $1.6 billion to supply high-nickel materials to LG Chemical.

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