According to Mining News Pro - * Galaxy shortlists 7 for Argentina project
* POSCO says to build lithium plant in Argentina
* POSCO plans to start production from 2021
* Galaxy shares jump 11 pct
(Recasts, adds comment from Galaxy MD, shares)
By Jane Chung and Sonali Paul
SEOUL/MELBOURNE, Aug 28 (Reuters) -
South Korean steelmaker
POSCO has sealed a deal to buy lithium mining rights
in Argentina from Galaxy Resources for $280 million,
beefing up the Australian miner`s funds to dig a lithium mine on
neighbouring ground.
POSCO said in a statement on Monday that it would also build
a lithium plant in Argentina, planning to produce 25,000 tonnes
of the commodity per year for 20 years starting from 2021. Demand for lithium, a critical ingredient for batteries used
in electric vehicles, has grown in recent years as some
consumers shift away from cars powered by fossil fuels.
POSCO said the move would secure stable lithium supplies for
its battery material manufacturing affiliate POSCO ES Materials.
Galaxy, which agreed in May to sell the rights for the Salar
del Hombre Muerto salt flat in northern Argentina, plans to use
the funds to develop its flagship Sal de Vida lithium project in
South America. Galaxy has shortlisted seven firms as potential strategic
partners at Sal de Vida, and hopes to decide on the best option
before the end of 2018, Managing Director Anthony Tse told
Reuters.
The shortlist includes Chinese, other Asian and non-Asian
firms, including lithium end-users, firms already in the lithium
industry and materials and industrial firms looking to get into
the lithium supply chain, Tse said.
"You probably would be surprised in terms of some of the
not-so-usual suspects that you might see on that list," Tse said
in an interview.
He said the deal with POSCO was carried out separately as
the South Korean steel giant was focused on developing its own
lithium processing technology, but he expected there will be
opportunities for them to share infrastructure.
"They wanted to get their hands on a fairly sizable and high
quality resource in the region," Tse said.
Shares in Galaxy, one of the Australian market`s most
heavily shorted stocks, jumped as much as 11 percent on Tuesday
after the deal with POSCO was signed. The stock last traded up 3
percent outperforming a 0.6 percent rise in the broader market .
Tse said that while the world`s major lithium producers
Chile`s SQM , FMC Lithium and Albemarle Corp have mixed views on the outlook for near-term lithium
carbonate prices, Galaxy expects rising demand to shore up
prices.
"We`re somewhat positive in that we think the raw material
consumption will actually step up as (electric vehicle)
production has to step up in the second part of the year."
Over the past two to three years, China`s electric vehicle
production has been much stronger in the second half of the year
than the first half, driving up demand for battery materials
later in the year.
Demand is also expected to rise in Japan and South Korea,
Tse said.
($1 = 1.3669 Australian dollars)
(Reporting by Jane Chung and Hyunjoo Jin in Seoul and Sonali
Paul in Melbourne
Additional reporting by Susan Mathew and Aaron Saldanha in
Bengaluru
Editing by Joseph Radford and Richard Pullin)