Galaxy Resources Limited (ASX:GXY) has signed a $280 million deal with one of South Korea’s major steelmakers – POSCO.
The deal gives POSCO access to lithium mining rights currently held by Galaxy in Argentina and are part of POSCO’s plan to build a lithium plant to produce 25 000 tonnes of lithium per year.
With increasing demand for lithium driven by electric vehicles and smartphones, a number of non-lithium companies are taking interest in the market. Last October, major iron ore player FMG confirmed they were also looking for lithium in the vast Pilbara region in Western Australia.
POSCO said the deal with Galaxy would help secure stable lithium supplies for its battery material manufacturing arm – POSCO ES Materials. In February this year, POSCO also entered an $80 million deal with Pilbara Minerals, securing chemical grade Spodumene concentrate.
Galaxy has stated that earnings from the POSCO deal would be used to fund its flagship Sal De Vida (Salt of life) project in South America.