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Posco, Albemarle lithium supply talks collapsed


Posco told Chile’s development agency Corfo that it did not reach an agreement to build a lithium plant in Chile that would be supplied by US producer Albemarle, a source close to the South Korean engineering firm told BNamericas.
The company told Corfo it transferred its rights to receive lithium from Albemarle to other selected companies, the source added.

In March last year, Corfo selected three groups to build facilities to add value to the lithium chain. Posco-Samsung SDI was one the groups along with Chile’s Molymet and China's Fulin Group.

Corfo’s contract with Albemarle for lithium production includes a clause that states 25% of output has to be offered at preferential prices to those companies adding value to the metal.

Talks between the two companies stopped, Youngil Oh, Posco’s senior principal researcher told BNamericas at the Lithium Supply & Markets conference in Santiago, confirming the original source.

“In the agreement, Albemarle was expected to supply lithium hydroxide [to Posco] to produce battery grade-cathode. However, I got some information that Albemarle is not ready to produce lithium hydroxide and they want to continue producing lithium carbonate. Maybe their business plan changed,” Oh said.

Posco was in talks with Albemarle on diversifying its portfolio by producing lithium hydroxide, Santiago Kim, the former’s E&C general manager in Chile, told BNamericas in a May 2018 interview.

“For the battery to last longer, you need lithium hydroxide, rather than lithium carbonate. Lithium hydroxide has even more added value,” said Kim.

Posco is currently selling next-generation cathode material called NCM 811 (nickel-cobalt-manganese in an 8:1:1 ratio), which has increased energy density for IT and mobile devices. The new production line in Chile was supposed to supply Samsung SDI.

“Unfortunately Posco-Samsung was not interested in the lithium carbonate produced by Albemarle Chile, but [it was interested] in lithium hydroxide, which we don’t produce in the country,” Albemarle told BNamericas in response to an email.

The company added that it maintained open communication channels with the other two winners of the tender, and it hopes to reach an agreement with them. “Our commitment to the development of a productive ecosystem around lithium remains intact,” said the company.