A few snippets from some POSCO quarterly released where they...

A few snippets from some POSCO quarterly released where they discuss lithium.

2018 3Q Earnings Release - Q&A Script
2018-10-23

Nothing

2018 Earnings Release - Q&A Script
2019-01-31

Secondary Battery Material Business

POSCO Group will operate anode and cathode businesses through POSCO Chemtech after merger with POSCO ESM in April this year. The revenue for anode was 170 billion won in 2018 and is expected to double from last year as POSCO Chemtech is aggressively expanding capacity of anode and cathode businesses. POSCO operates lithium business directly through PosLX in Gwangyang. The revenue was 7.5 billion won in 2018 and is expected to be doubled to 15 billion won in 2019 by improving productivity and procuring more raw materials. Construction of 40,000 ton capacity of PosLX will be commenced in the Yulchon industrial complex in Gwangyang this year once we attain the BOD approval. We expect sales to occur as the construction is completed in 2H 2020 and 600 billion won of revenue in 2021. Also, POSCO has a JV with Chinese company which the 5,000 ton capacity cathode facility are under construction in the target of 100 billion revenue in 2020.

Hydrogen Fuel Cell Vehicle

There are many debates on hydrogen fuel cell car whether the era will come soon or how it will compete with electric vehicle. POSCO started earlier to develop technology of electric vehicle battery materials as we considered the EV
era is coming faster. This year we newly formed a team dedicated to EV industry to cooperate more closely with electric car manufacturers.

2019 1Q Earnings Release - Q&A Script
2019-04-24

Li-ion Battery Materials

POSCO currently has one lithium plant in operation in Gwangyang. Production volume from this plant will double to 1 thousand tons this year. Considering all the operating conditions,
the volume is at a stable level. For revenue, per ton price will be around U$ 15,000.

Revenue from lithium business will greatly increase once the commercialized plan to be built
in Gwangyang Yulchon Industrial Complex will start operation in 2021. This uses raw material
from hard rock mine in Australia owned by Pilbara. The capacity will reach 30-40 thousand
tons annually. We design 70% lithium hydroxide and 30% lithium carbonate as product mix.
Depending on our customers’ request, the ratio could vary. If necessary, the ratio of lithium
hydroxide could go up to 90%.

After that, commercialization of plant to use material from Argentine brine will also be in full
swing. Acquisition of mining right was fully transferred to us in February this year. The area
spans 17,500 hectares with identified reserve of 2.25 million tons. Additional exploration is
underway, and it seems highly possible additional reserve can be confirmed.

In 2H this year, demo plant will be constructed in the brine area, which will start to be operated from 1Q 2020. At early or end of 2021, 25 thousand ton capacity commercialized plant will be built in Argentina.Lithium phosphate, intermediate product, will be produced on the region near the brine, and lithium hydroxide and lithium carbonate will be produced in an industrial complex located on the lower altitude. It means that all the final products will be produced locally. The mix between hydroxide and carbonate will also be 70 to 30.

2019 2Q Earnings Release - Q&A Script
2019-07-23

Lithium-ion Battery Materials Business

POSCO has been operating a demo plant that extracts lithium from ore since late 2018 and
plans to start commercial investment in 2H this year. JV between POSCO and Pilbara is planning to build a plant in Korea with an annual production capacity of 40,000 tons of lithium carbonate.

Our second lithium project will be situated near salt lake in Argentina. POSCO signed a
contract to take over the mining right in August last year and completed its registration in
Argentina in February this year. Investment in the establishment of demo plant has been
decided recently as environmental accreditation has progressed smoothly, including environmental impact assessment. Construction of demo plant will begin in August this year,and operation will be started next year. We will decide on investment building commercial
plant with an annual capacity of 25,000 tons in 1H 2021. POSCO is currently discussing LOIs
for long-term sales with multiple customers, and some of them have been signed up, as the
company is able to supply 65,000 tons of lithium annually in the next few years.

2019 3Q Earnings Release - Q&A Script
2019-10-24

Lithium Business

Last year in August, POSCO made a contract with Galaxy Resources to acquire mining rights of brine in Argentina and this deal was finally sealed in February this year.
Confirmed reserve by Galaxy was 2.25 million tons based on M&I resources. After closing the deal, POSCO has been executing additional exploration in second and third stages on its own. As a result of second stage exploration, it is evaluated that 5.67 million tons are reserved volume, which is significantly larger than the initial evaluation, and extraction period can be extended from initially forecast 20 years to 50 years. The value of this asset’s mining rights acquired at USD280 million could be higher as it is calculated in accordance with resources volume. To realize it to profits, the demo plant is currently being built and tested, and investment for commercialization should be decided in early 2021. Construction of commercial plant will start 1H 2020, and it will take 1.5 to 2 years until completed. Along with the brine mining, we are planning to invest in 40,000 tons of lithium production annually from hard rock mine. Within 1.5 to 2 years,
commercialized plant construction will be finished as well.

In regards to the lithium price outlook, we view that the fall of lithium price this year was due to the rapid increase from previous years mainly in the Chinese market. The Chinese government’s reduction on EV subsidies led to a demand weakening and the price as well. Passing the year 2020, the price will rebound according to our outlook. By 2022, next generation EV’s produced mainly by European makers will be released in the market and the demand will also follow in a major scale.
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I find it interesting that POSCO will be building a demo plant, and that where as the commercial scale plant was earmarked for construction around start or end 2021, and then crept to start of 2021, then finally ended up commencing construction at the start of 2020.

Also, accreditation wise, from what I understand POSCO are not in a position to construct a commercial plant though Galaxy is.

One more thing, I noticed that where as Pilbara's name was previously mentioned tied to the hard rock mine production, in the recent announcement there is no mention. Given their uncertain circumstances of late, perhaps POSCO is having second thoughts.