Pilbara Minerals Ltd said on Tuesday it had finalised a joint venture agreement with steel giant POSCO to develop a lithium hydroxide conversion facility in South Korea, sending the Australian miner's shares more than 9per cent higher.
The facility in Gwangyang is expected to cost up to US$750 million and comes at a time when electric vehicles demand is set to soar as the world transitions to greener modes of transport.
Lithium is used to make EV batteries and has become a highly sought after commodity as carmakers and other companies look to secure supply.
Pilbara will own 18per cent of the joint venture, with an option to raise its stake to 30per cent, 18 months after the facility ramps up, it said in a statement. Construction is set to start by March next year and the plant is expected to open in late 2023.
POSCO did not immediately respond to a request for a comment.
Under the agreement, Pilbara will supply 315,000 tonnes a year of chemical grade spodumene concentrate, the mineral that lithium is extracted from, to the facility. The company added that the larger supply agreement would not impact supply to other customers.
Pilbara shares, which were halted on Monday, climbed 9.1per cent to AUS$2.28 in early trade.
(Reporting by Harish Sridharan and Nikhil Kurian Nainan; Editing by Rashmi Aich)