POSCO invests $240 million to acquire stake in nickel mine in Australia.
POSCO, the country’s leading steelmaker, has signed a deal with Canada-based First Quantum Minerals to purchase 30 percent of the Australian nickel company Ravensthorpe Nickel Operation for $240 million.
First Quantum Materials is the parent company of Ravensthorpe and owns 100 percent of its mine.
“With the acquisition of the stake, POSCO has strengthened its position as an all-around electric vehicle (EV) battery materials business by acquiring access to nickel ― alongside lithium and graphite ― to supply both cathode and anode materials,” a POSCO official said.
POSCO and First Quantum have also agreed to evaluate a strategic partnership to produce battery precursor materials using the nickel mined from Ravensthorpe.
POSCO will be able to obtain 7,500 tons of nickel per year in mixed nickel-cobalt hydroxide precipitate (MHP) produced at Ravensthorpe, starting in 2024. The Korean steelmaker has sought to expand its rechargeable battery materials business as demand for electric vehicles (EV) is expected to surge in the coming years.
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Ravensthorpe is a large-scale, open pit nickel and cobalt mines located in Western Australia. It produces high-quality MHP, which is a key material in the production of EV battery cathodes.
POSCO, the world’s fourth-largest steel producer, is also a leading producer of cathode and anode materials for EV batteries and is seeking to expand this.
With the new agreement, POSCO will be able to produce 32,000 tons of MHP annually starting in 2024 with 7,500 tons of nickel through Ravensthorpe. That is enough to supply batteries for 180,000 EVs.
Nickel is a key component in producing cathodes that can enhance secondary battery capacity and increase the range of an EV. Due to this, there has been a rise in demand for cathodes made using nickel, which makes securing the transition metal a crucial factor in staying ahead in the EV battery materials market.
Philip Pascall, chairman and CEO at First Quantum Materials, was quoted as saying in a press release.
We are pleased to welcome POSCO as our new long-term strategic partner in Ravensthorpe.
“Our respective organizations have complementary skillsets which will allow us to maximize the strategic value of Ravensthorpe as a key long-term supplier of nickel to the EV battery sector. We look forward to working closely with POSCO at Ravensthorpe and exploring options to broaden our relationship.”
POSCO aims to supply 400,000 tons of cathode and 260,000 tons of anode materials annually to take up 20 percent of the global secondary battery market and achieve sales of 23 trillion won annually by 2030.
However, despite POSCO’s moves, industry watchers say the company is still in the beginning stages and more acquisitions and investments are critical for it to become a leading player globally.
POSCO is aiming to become the largest supplier of anode materials locally by 2023 and has been aggressively increasing its production capacity.
Hyung Won-suk, a researcher at Hi Investment & Securities said.
This is just the beginning of POSCO’s investments in the secondary battery materials sector.
“Global demand for anode materials is expected to be around 2.4 million tons, and half of this will be supplied by Korea’s five anode materials production companies as there are only two key overseas competitors ― one each in Europe and Japan ― and Korea is home to three of the major global EV battery firms,”
“In my calculation the five Korean firms combined could produce 650,000 tons of anode material by 2023, so these local firms including POSCO Chemical will need to make aggressive investments to drastically increase their production rate in the near future in order to account for over 50 percent of expected global anode demand,” the analyst added.
POSCO invests $240 million to acquire stake in nickel mine, May 20, 2021
