Korean Posco Corporation and the Australian company Pilbara Minerals has signed an agreement. According to him, the first will buy the second lithium concentrate. The purchasing volume of approximately 240 thousand tons. The deal also suggests that Posco will buy it for 4.75% of the shares in Pilbara Minerals. It would cost $ 62.5 million. The same amount will be purchased also convertible bonds. In the future they can be capitalized.
Posco has planned to produce approximately 30 thousand tons of products annually. Begin the implementation of the plan it is 2020. Deliveries will be made in POSCO ES Materials. It is a subsidiary of the company. Also it will supply lithium products of Huayou Cobalt. It’s a Chinese company. In addition, consumers are Korean manufacturers of lithium-ion batteries. They are used for electric vehicles and gadgets.
Australian Pilbara Minerals is also making big plans. In the second half of this year to begin to develop a new field. We are talking about the Pilgangoora Deposit, which is located in Western Australia. Will be produced about 300 thousand tons of lithium concentrate per year. In the future the volumes will increase and will reach 800 thousand tons per year. Posco plans to build a new plant. It will produce lithium products. Pilbara Minerals is going to buy 30% of its shares.
The signed agreement gives an opportunity to receive a stable supply of lithium. While the Korean company may find other sources of supply. It all depends on the prices that will be set by suppliers. Thus, you will get the best options.