South Korean steel and battery materials group POSCO Holdings (NYSE:PKX,KRX:005490) finalized A US$765 million agreement with Perth-based Mineral Resources (ASX:MIN,OTCPL:MALRF) to acquire a 30 per cent stake in two major hard-rock lithium mines in Australia.
Under the final terms, Posco will take a 30 percent equity stake in the new venture and secure the rights to 30 percent of lithium concentrate produced at the Wodgina and Mount Marion lithium mines in Western Australia.
The off-take agreement guarantees POSCO a stable supply of approximately 270,000 tonnes of lithium concentrate annually. This quantity is expected to yield 37,000 tons of battery-grade lithium hydroxide per year, enough to power more than 900,000 electric vehicles.
Vodgina is one of the five largest hard-rock lithium operations globally, with reserves of approximately 6.2 million tonnes of lithium carbonate equivalent with high-grade concentrations of approximately 5.5 percent. Meanwhile, the neighboring Mount Marion mine has reserves estimated at 2.2 million tonnes.
Finalizing the deal, which was slated to begin in November 2025 preliminary agreementCoinciding with a sharp recovery in commodity markets.
After a two-year-long slump, lithium prices have risen nearly 50 percent since the beginning of the year. The price action is being driven by a reduction in supply from China and a pickup in demand from the energy storage systems sector.
POSCO Holdings sees this acquisition as a cornerstone of its “material patriotism” strategy championed by Chairman In-hwa Chang. The corporate mandate aims to localize the secondary battery material supply chain and reduce dependence on third-party raw materials.
“Securing raw material competitiveness is paramount to becoming the world’s No. 1 lithium company,” Chang said when the strategy was formalized late last year. “We will diversify the global lithium supply chain through active investment.”
Lee Ju-tae, President of POSCO, said, “This partnership combines the mining expertise of mineral resources with the processing technology of POSCO Holdings, contributing to the stabilization of the global battery material supply chain.” “We will strengthen our long-term partnership in the global lithium market based on mutual trust.”
For mineral resources, partial disinvestment provides the capital injection needed to reduce corporate debt.
Concurrent with the initial Australian agreement last November, Posco invested US$65 million to acquire the Argentine subsidiary of Canadian Lithium South (TSXV:LIS,OTCQB:LISMF).
The transaction secured 100 percent of the mining rights adjacent to POSCO’s existing holdings within the Hombre Muerto salt lake in Argentina, which consolidates one of the world’s highest grade lithium brine reserves.
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Securities Disclosure: I, Gian Liguid, do not have any direct investment interest in any of the companies mentioned in this article.
