The Chilean Production Development Corporation (CORFO) announced on March 10 that the POSCO-Samsung SDI consortium was selected among global bidders to lead a lithium project that would produce cathode materials in Chile out of local lithium.
Since last May, CORFO had been accepting bids for a cathode production project to expand the downstream lithium industry and foster the industry in Chile. 12 companies from a total of seven countries – Korea, Chile, the US, Canada, China, Russia, Belgium – participated in the bid, and POSCO and Samsung SDI were selected.
The POSCO-Samsung SDI Consortium will invest KRW 57.5 billion to establish a joint venture for the production of cathode materials in the city Mejillones of Northern Chile. It also plans to annually produce 3,200 tons of high-capacity cathode materials for electric vehicles out of Chile’s lithium, supplied at the lowest export price, starting in the second half of 2021.
Last January, POSCO entered the Chinese market by signing a joint venture agreement with China’s Huayou Cobalt. Its purpose was to build a cathode material and precursor plant and expand its secondary battery business to the South American market, thereby establishing itself as a global cathode material producer. As per the contract, Samsung SDI will receive a constant, stable supply of cathode materials, reinforcing its competitiveness in the supply and demand of raw materials for batteries.
As countries around the world are currently reinforcing environment-friendly policies, demand is rapidly increasing for energy storage devices for electric vehicles and industries, including large batteries for IT. Therefore, the market for cathode materials, which are essential for lithium-ion batteries, is expected to more than quadruple from 210,000 tons in 2016 to 860,000 tons in 2020, and in turn, expectations for the two companies’ successful global joint venture are rising as well.