Posco Holdings, a unit of South Korean steel giant Posco Group, announced this week it had completed building a lithium hydroxide plant in the Yulchon Industrial Complex in Gwangyang province.

The refining plant, the first of its kind in the country, would be operated by Posco-Pilbara Lithium Solution - a joint venture with between Posco and Australian mining company Pilbara Minerals.

The facility, which cost KRW575bn (US$451m), has capacity for 21,500 tons of lithium hydroxide per year and would help strengthen the group’s presence in the electric vehicle (EVs) battery supply chain.

Until now, the company has imported lithium hydroxide.

Posco said the plant qualified for tax benefits under the US’ Inflation Reduction Act (IRA) as it sources raw materials from Australia and Argentina.

At an opening event, Posco said it planned to start construction in 2024 of a second lithium plant with similar capacity which would give it total capacity for 43,000 tons a year or enough for around 1m BEVs.