As POSCO Group has put forward resource development as another business pillar beyond its core steel business, its strategies for nickel and lithium, key raw materials for secondary batteries, are diverging. While the nickel business has begun to slow down by halting plant operations or shelving new investments, investment in the lithium business is expanding.
POSCO Group recently announced a plan to reorganize its business portfolio into industrial resources (steel), strategic resources (lithium, cathode and anode materials, rare earths, etc.), and energy resources (LNG, renewable energy), and signaled a determination to grow its lithium business to rank among the "global lithium top 5" by 2033.
According to related industries on the 23rd, POSCO Group affiliate POSCO Co., Ltd. built a high-purity nickel refining plant for secondary batteries in Gwangyang, South Jeolla, in 2024 with an annual capacity of 20,000 tons, but it is not currently operating. This plant refines nickel matte produced by SNNC (a joint venture between POSCO Holdings and New Caledonia) from nickel ore secured by POSCO Group through New Caledonia raw material subsidiary NMC, and then uses it as feedstock to produce high-purity nickel for secondary batteries.
Ravensode, an Australian nickel mining and smelting company in which POSCO Co., Ltd. acquired a 30% equity stake in 2021, also halted operations after 2024. A POSCO Holdings official, the holding company of POSCO Group, said, "We are retaining the Ravensode equity," and added, "We will consider restarting operations when business conditions, including the nickel market, improve."
There are also nickel-related projects that were suspended after construction began or put on hold at the review stage. In May last year, POSCO Holdings liquidated POSCO CNGR Nickel Solution, a joint venture established to pursue a nickel refining business in the Yeongilman Industrial Complex in Pohang.
POSCO CNGR Nickel Solution was founded as a joint equity venture with China's CNGR, the world's No. 1 company by precursor market share. It had planned to import nickel matte, an intermediate with about 70% purity, from CNGR's nickel smelting subsidiary and refine it into 99.9% high-purity nickel for secondary batteries. Although a groundbreaking ceremony was held in May 2024, the project was delayed and ultimately liquidated.
Industry watchers cite the secondary battery downturn due to the EV chasm and weakened economics from falling nickel prices as the main reasons for the nickel business retrenchment. Nickel prices soared to $40,000–$50,000 per ton during the Russia-Ukraine war in 2022 but are now trading at around $16,000–$17,000.
◇"Global lithium top 5" goal… Expanding investment in Australia and Argentina
By contrast, POSCO Group is accelerating the build-out of its value chain by expanding its lithium business.
On the 2nd, POSCO Group held "CEO Investor Day" and said it would adopt industrial resources (steel), strategic resources (lithium, cathode and anode materials, rare earths, etc.), and energy resources (LNG, renewable energy) as future growth strategies. Among them, lithium drew the most attention.
POSCO Group presented a blueprint to complete an annual lithium production system of 173,000 tons by 2033 and leap into the global "lithium top 5" corporations. It also set a 2035 operating profit target for the lithium business of 1.8 trillion won.
To strengthen its lithium business, POSCO Group secured equity in an Australian lithium mine and acquired additional mining rights in an Argentine lithium brine deposit. In April, it signed a roughly $765 million lithium mine equity investment agreement with Australian mining company Mineral Resources. It also acquired additional mining rights in the Hombre Muerto brine in Argentina in April. Through this, it secured a total of 15 million tons of brine lithium in terms of reserves.
POSCO Group is increasing investment in the lithium business because it judges that the results of past investments are becoming visible and growth has been validated. POSCO Holdings posted first-quarter sales of 17.876 trillion won and operating profit of 707 billion won this year. Compared with a year earlier, sales rose 2.5% and operating profit rose 24.3%.
The lithium business contributed significantly to improved profitability. POSCO Argentina, which handles the Argentina brine lithium project, swung to an operating profit in the first quarter on the back of commercial production. POSCO-Pilbara LITHIUM SOLUTION, which produces lithium hydroxide in Gwangyang, also narrowed losses thanks to a recovery in lithium prices and higher output.
Lithium prices are highly volatile in the short term, but in the mid to long term, demand is expected to grow as the electric vehicle and energy storage system (ESS) markets expand. Lithium is a key raw material for lithium-ion secondary batteries. It is needed not only for ternary batteries but also for lithium iron phosphate (LFP) batteries, which are widely used in mid- to low-priced EVs and ESS.
Nickel, by contrast, is a key raw material for ternary (NCM/NCA) batteries, which are mainly installed in high-performance, long-range EVs. As the EV chasm increases the need for cost reductions at automakers, adoption of LFP batteries, which do not use expensive metals such as nickel and cobalt and thus have lower manufacturing costs, is on the rise.