Posco Holdings Inc (PKX) Price

POSCO Commits KRW 1.1 Trillion to Secure Lithium Supply from Australia and Argentina

## Executive Summary **POSCO Holdings** has announced a strategic investment totaling KRW 1.1 trillion (approximately $750 million) to secure long-term lithium supplies from sources in Australia and Argentina. This initiative is designed to enhance the company's raw material competitiveness for its secondary battery materials business and diversify its supply chain away from a single geographic concentration. The move involves a significant joint venture in Australia and a full acquisition of a lithium-focused subsidiary in Argentina, underscoring the company's commitment to solidifying its role in the global electric vehicle (EV) market. ## The Investments in Detail The KRW 1.1 trillion capital allocation is divided between two key international transactions: * **Australia:** **POSCO** has committed approximately $765 million to a joint venture with Australian mining firm **Mineral Resources Ltd**. This investment secures a 30% stake and provides **POSCO** with an offtake agreement for 270,000 tons of lithium concentrate annually from the Wodgina mine. This structure guarantees a significant and stable volume of raw material necessary for battery production. * **Argentina:** In a separate transaction, **POSCO** invested $65 million to acquire 100% of the shares in the Argentine subsidiary of Canadian firm **Lithium South Development Corp.** The transaction, managed by its local entity **POSCO Argentina SA**, grants the company full control over the subsidiary's lithium projects, providing a direct source of the critical mineral. ## Market Implications This dual investment significantly strengthens **POSCO's** vertical integration within the battery supply chain. By securing direct and long-term access to lithium, **POSCO** mitigates risks associated with price volatility and supply disruptions in the open market. The market has reacted with bullish sentiment, as control over raw materials is considered a critical competitive advantage in the rapidly expanding EV battery sector. This strategic sourcing is expected to provide cost efficiencies and supply stability, positively impacting **POSCO's** long-term financial performance and stock valuation. ## Broader Context **POSCO's** large-scale investment is part of a broader industry trend where battery manufacturers and automotive companies are aggressively moving to secure upstream resources. As the global transition to electric vehicles accelerates, the demand for essential minerals like lithium has surged. Companies that can lock in stable, long-term supplies are better positioned to manage costs and production schedules. This move by **POSCO** reflects a proactive strategy to de-risk its operations and build a resilient supply chain, positioning it as a key player in the competitive global battery materials landscape for years to come.