POSCO Holdings has secured approximately 1 trillion won in liquidity from the Inter-American Development Bank Group (IDB Group) to accelerate its lithium operations in Argentina.
POSCO Argentina, the company’s lithium brine production subsidiary, announced on August 28 that it received approval for a total short-term borrowing limit of $700 million from IDB Invest, the private investment arm of the IDB Group, on August 4.
The IDB Group provides financial support for resource development projects in the region that demonstrate strong business performance and competitiveness as part of its "Core Mineral Supply Chain Support Strategy" for Latin America. The approval of the borrowing limit for POSCO Argentina's lithium project was positively assessed by the IDB Group for meeting global environmental, social, and governance (ESG) standards and contributing to economic development in the region.
This borrowing approval is expected to enhance the financial stability of POSCO Argentina, allowing it to secure operational funds for its lithium brine plants 1 and 2 (scheduled for completion in the second half of the year) as needed.
With the acquisition of low-interest large-scale operational funds, POSCO Argentina will also benefit from substantial tax incentives. Under the intergovernmental agreement establishing the IDB, tax benefits on interest and financial transaction taxes incurred during the borrowing process are expected to significantly reduce financial costs, thereby enhancing the project's profitability and competitiveness.
Previously, POSCO Holdings obtained approval for Argentina's Large-Scale Investment Attraction System (RIGI) during the Korea-Argentina summit on July 31. With this recent approval from the international financial institution, the company has further strengthened its investment and operational foundation for local lithium projects.
Business performance is also improving. POSCO Argentina successfully turned a quarterly profit for the first time in the second quarter of this year. POSCO Holdings aims to enhance the competitiveness of its Argentine lithium operations based on improved profitability, policy support, and stable funding.
Meanwhile, POSCO Holdings is simultaneously expanding its lithium production capacity and raw material base in Argentina. The company currently operates a phase 1 lithium brine plant with an annual capacity of 25,000 tons and is set to complete a phase 2 plant of the same size in the second half of this year. Once both phases are operational, local production capacity will increase to 50,000 tons annually.
* This article has been translated by AI.
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