SEOUL, Feb 27 (Reuters) - South Korean steelmaker POSCO on Tuesday said it had agreed to buy up to 240,000 tonnes of lithium concentrate per year from Australian miner Pilbara Minerals, using the commodity to help supply producers of electric vehicle batteries.
As part of the deal, the Australian unit of POSCO will acquire a 4.75 percent stake in Pilbara for A$79.6 million ($62.49 million).
POSCO said in a statement that it planned to make about 30,000 tonnes of lithium products per year starting from 2020. It plans to supply these to firms including battery material manufacturing affiliate POSCO ES Materials and its joint venture with China’s Huayou Cobalt Co Ltd, as well as South Korean battery makers.
Key South Korean battery makers include LG Chem, Samsung SDI and SK Innovation.
POSCO said the deal meant it had secured a stable source of raw materials for manufacturing batteries, adding that it would be able to choose between different sources of lithium depending on prices. It said other sources of the material included recycling.
POSCO also agreed to acquire convertible bonds worth about A$79.6 million that can be turned into another stake in Pilbara.
Pilbara Minerals, which owns 100 percent of the Pilgangoora lithium mine in western Australia, plans to begin production of about 300,000 tonnes of lithium concentrate in the second half of this year, eventually reaching as much as 800,000 tonnes annually, POSCO said.
It added that Pilbara also planned to take a 30-percent stake in POSCO’s planned future lithium factory. POSCO has yet to disclose a timetable or location for that facility.
$1 = 1.2737 Australian dollars Reporting by Joyce Lee Editing by Joseph Radford