POSCO Group's lithium production plant and brine water storage facility in Argentina / Courtesy of POSCO Chemical

POSCO Chemical is increasing its battery material production capability after securing a stable supply of lithium, an essential material for producing cathodes for electric vehicle (EV) batteries, the company said, Tuesday.

The company, which produces cathode and anode materials, said it has greatly increased its battery material business competitiveness thanks to POSCO Group's lithium investment.

POSCO Group will secure 93,000 tons of lithium hydroxide per year, which can be used in 2.2 million EVs by 2024. The group's lithium hydroxide plant in Argentina, for which it held a groundbreaking ceremony on March 23, plans to secure an annual production capacity of 50,000 tons by 2024. Also the group's ore lithium plant in Gwangyang, South Jeolla Province, will have an annual production capacity of 43,000 tons as of 2023.

With the supply of lithium produced by POSCO Group, POSCO Chemical will be able to procure all 91,000 tons of lithium needed to produce 225,000 tons of cathode materials annually in 2024. The company said its self-sufficiency rate of lithium is expected to reach 102 percent.

With the explosive growth of EV market, the price of lithium is also soaring. According to the government's data, the lithium price in the global market was increased to 90,000 won per kilogram this month from 16,000 won last March.

Lithium accounts for the largest part when making cathodes; in fact, about 0.46 tons of lithium is needed to produce 1 ton of cathode material.

As POSCO Group is the only global cathode material group that has both lithium mining rights and mass production systems of lithium, POSCO Chemical expects it will have unrivaled business competitiveness in the battery materials business.

"The winner of raw materials will be the winner of the battery materials business," Min Kyung-joon, CEO of POSCO Chemical, said. "Based on our raw material procurement capability, supported by POSCO Group, we will actively promote our materials production capability to global battery companies."