South Korean steel maker Posco continued to increase its exposure to the fast-growing electric vehicle (EV) segment after it announced plans to build a new lithium hydroxide extraction plant, according to local reports.

Construction of the plant was scheduled to begin later this year in the South Korean city of Gwangyang and expected to be completed by 2023.

The facility would have an annual production capacity of 43,000 tons of lithium hydroxide, a key material for electric vehicle (EV) batteries, enough to power around 1m EVs. The material would be extracted from spodumene imported from Australia.

Posco was also scheduled to begin construction of a lithium processing plant in Argentina, near the Salar del Hombre Muerto salt lake, with capacity of 25,000 tons per year. This followed the acquisition in 2018 of mining rights in the country from Australia’s Galaxy Resources for US$280m.

The South Korean company said the site had confirmed lithium reserves of 13.5m tons, enough to make batteries for around 370m EVs.

Posco said it plans to increase its global lithium production capacity to 220,000 tons per year by 2030.

The company has made significant inroads into the EV supply chain this year. Earlier this month it announced it would supply cathodes for the batteries to be fitted to General Motors electric vehicles (EVs) produced in the US.

Last month Posco said it planned to expand capacity to produce bipolar plates used in hydrogen fuel cell systems.