Korea's Lithium Power Play High in the Andes

The Salt Flat That Changed the Rules

At 4,000 meters in Argentina’s Salta Province, the air is thin enough to make running impossible. That did not stop POSCO from building a lithium factory there.

The facility, a series of vast blue evaporation ponds fed by brine pumped from 400 to 500 meters underground, began commercial production in March. By the second quarter, POSCO Argentina had posted its first quarterly profit — a milestone that makes it the first Korean company to produce lithium from an overseas salt lake. The white, flour-like powder moving through its lines today is lithium carbonate, the intermediate that will eventually become the hydroxide baked into battery-grade cathodes at POSCO Future M’s domestic plants.

It sounds like a company press release until you understand what just happened. Korea — a country with virtually no lithium of its own — has quietly carved out a foothold in one of the world’s richest brine deposits, at a moment when every major battery manufacturer is scrambling to distance itself from Chinese supply-chain dominance.

A Buy in the Depression

The story of how POSCO got here reads like a commodity-play case study.

In 2018, the group acquired the Ombré Muerto salt lake for $280 million. At the time, the asset was considered unremarkable — or so the market thought. Other companies had drilled 100 to 200 meters and estimated reserves of roughly 2.2 million tons. POSCO drilled to 600 meters and found six times that amount. Today, Ombré Muerto is ranked among the world’s top two brine deposits, holding an estimated 13.5 million tons of lithium in place.

The timing was deliberate. Lithium carbonate prices had collapsed from above 120,000 yuan per ton in 2022 to under 60,000 yuan by mid-2023, crushed by a surge in Australian mine output and a temporary slump in EV demand. POSCO bought while everyone else was selling.

Last year, the group expanded its position again, purchasing the adjacent Ombré Muerto North site for $65 million in April. Combined reserves now stand at 15 million tons. Even after accounting for extraction yields, the remaining resource could theoretically support the production of batteries for 70 million electric vehicles.

The land lease itself spans 287 square kilometers — nearly half the area of Seoul.

Why Argentina Matters Now

The economics of brine lithium have shifted dramatically since POSCO made its play. Lithium carbonate has rebounded past 200,000 yuan per ton, fueled by two converging demand curves: continued EV sales growth and a new, unexpected driver — battery energy storage systems for AI data centers. Both are pulling on the same supply chain that China controls with growing stranglehold.

This is where the geopolitical dimension enters. China processes roughly 60 to 70 percent of the world’s lithium and an even larger share of refined battery materials. Every major automaker and battery maker in the West is now pursuing what industry insiders call “de-Sinicization” — diversifying supply away from Chinese control. The US government has made this a policy priority through the Inflation Reduction Act’s critical-minerals provisions; the European Union has its own Critical Raw Materials Act. Korea is playing the same game.

POSCO’s Argentine operation is, in effect, a Korean answer to that pressure. The company is no longer just a steelmaker buying raw materials — it is becoming a producer of them.

The Production Roadmap

POSCO’s timeline is aggressive but specific. Plant 2 in Salta is scheduled for completion later this year. Plant 3 is planned for 2030 and Plant 4 for 2033. By 2033, the group aims to produce 100,000 tons of lithium annually from Argentina, combined with 73,000 tons from its Australian operations, reaching a total of 173,000 tons — enough to crack the global top five lithium producers.

The operation already has customers knocking. Battery and automotive suppliers are actively seeking supply contracts, drawn by the de-Sinicization imperative and the fact that POSCO’s Argentine lithium comes from a jurisdiction that, unlike many Chinese-aligned sources, carries no geopolitical strings attached for Western buyers.

Who Wins and Who Loses

The winners are clear. POSCO gains a strategic asset that transforms its identity from metals processor to integrated battery-supply player. Argentina gains a high-altitude industrial operation in a region that has long exported raw resources without capturing much value. The United States gains a non-Chinese lithium supply chain partner in a friendly government, which matters enormously for IRA compliance and defense-industry sourcing.

The losers are less generous. Chinese lithium processors lose a marginal but symbolically significant piece of their dominance — this is the first Korean-operated brine operation to reach commercial scale, and it proves the model is replicable. Australian hard-rock producers face a new competitor with access to lower-cost brine. And within Korea, traditional steel-centric investors may find themselves adjusting to a group that is betting its growth future on minerals as much as metals.

What Comes Next

The real test for POSCO will not be whether it can produce lithium — it has already proven that. The test will be whether it can scale to 100,000 tons annually from Argentina before the next commodity cycle turns, and whether the US and Korean automakers lining up for supply contracts are willing to sign long-term offtake agreements that lock in prices and volumes now rather than waiting for the next dip.

The brine at Ombré Muerto runs at 921 milligrams of lithium per liter — more than double the threshold that makes a deposit commercially viable. That margin is generous. But the altitude, the distance from infrastructure, and the pace at which POSCO is building these plants means execution risk remains real.

What is certain is that the map of critical-mineral supply is being redrawn. Korea, which imported nearly all its lithium a decade ago, now has a operating mine at 4,000 meters in the Andes. The next question is how far up that slope the group plans to climb.