South Korea’s leading steelmaker Posco will build the country’s first lithium factory at home that can churn out 43,000 tons per year, a move that will help reduce local EV battery makers’ reliance on imports of the core cathode material in making batteries for electric vehicles.

Posco’s board approved the company’s plan to annually produce 43,000 tons of lithium from a factory in Gwangyang, South Jeolla Province, the company announced on Wednesday. This is the first attempt by a Korean company to build a lithium production factory in the country.

For the lithium production factory, Posco is seeking to form a joint investment with Australia-based lithium producer Pilbara Minerals. They now are in discussion to decide the capital ratio and investment scale.

Posco and Pilbara Minerals plan to start construction in the first half of this year to finish construction by 2023.

The Korean steel giant has run a demo plant in Gwangyang to secure technology for production of an annual 2,500 tons of lithium. Through a JV, it can expand the output by 17-fold.

The amount of lithium, which will be produced at the new plant in Gwangyang, should be enough to make batteries to power 1 million EVs per year.

Posco’s lithium production factory will help reduce reliance on lithium import and complete a local value chain for EV battery production by 2023.

Korean cathode material manufacturers such as Posco Chemical and EcoPro BM have so far relied nearly 99.9 percent of lithium supply on imports from the U.S., China and South America. Chinese battery makers, including world’s leader CATL, have local lithium suppliers.

Posco shares gained 2.22 percent to close at 346,000 won ($309.70) on Thursday.

By Han woo-ram and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]