POSCO Holdings (005490.KS) has completed the acquisition of additional lithium salt lake mining rights in Argentina, accelerating efforts to strengthen its global supply chain competitiveness. Lithium, also called "white oil," is a key mineral for the electric vehicle and battery industries.
POSCO Holdings announced on January 9 that it finalized the 100% acquisition of the Hombre Muerto North salt lake mining rights held by Canada's Lithium South through its POSCO Argentina subsidiary in Buenos Aires on January 7 (local time).
The acquisition, valued at approximately $65 million (about 95 billion won), is a follow-up to the investment plan announced in November last year. The Hombre Muerto North salt lake, with estimated lithium reserves of approximately 1.58 million tons, is considered a high-quality resource due to its high lithium content and low impurity levels.
With this acquisition, POSCO Holdings has secured a total of 15 million tons of brine lithium resources in Argentina, including previously held mining rights. Considering extraction feasibility and yield rates, production of at least 3 million tons of lithium is expected. This volume is sufficient to produce batteries for approximately 70 million electric vehicles.
POSCO Holdings expects synergies and improved operational efficiency through integrated development with its existing Hombre Muerto mining rights. The company's medium- to long-term production capacity foundation is also expected to strengthen further with the addition of its Phase 1 plant with annual capacity of 25,000 tons currently in operation and Phase 2 plant with annual capacity of 25,000 tons scheduled for completion in the second half of this year.
Expectations for improved local investment conditions are also rising. POSCO Holdings is anticipating approval within this year for RIGI, the Argentine government's large-scale investment incentive program. RIGI is a system established by the Argentine government to attract stable long-term large-scale investments in national strategic industries such as energy, mining, and technology.
If approved, the company can reduce cost burdens and improve business profitability and price competitiveness through tax benefits including corporate tax reductions and tariff exemptions. Additionally, flexibility in fund management is expected to expand due to eased foreign exchange regulations, including phased permission to hold foreign currency from export proceeds.
"We will further enhance our global market responsiveness and supply chain competitiveness based on the additional lithium resources secured," POSCO Holdings President and CEO Lee Joo-tae said at the acquisition completion signing ceremony. In a subsequent meeting with Argentine Federal Economy Minister Luis Caputo, Lee stated, "POSCO Holdings' lithium business is a representative example of contributing to strategic industry development and investment expansion in Argentina," adding, "We will continue to foster a cooperative environment and provide support in the resources and materials sector so that RIGI can be approved promptly and the project can proceed without setbacks."