Posco Holdings PKX has announced plans to develop a trial lithium processing plant in the United States in collaboration with Australia's Anson Resources. This is in sync with the company’s efforts to expand its electric vehicle (EV) battery raw materials supply chain. This is the first time a South Korean company has taken steps to directly produce lithium in North America, enabling it to lessen its reliance on Chinese suppliers in order to meet the new import limits imposed by the United States.
The two companies have signed a memorandum of understanding (MoU) to construct the new pilot plant in Green River City, UT, next year. This plant will help determine the viability of Posco's Direct Lithium Extraction (DLE) technology for large-scale commercial production. The method uses natural evaporation to recover lithium from vast, low-concentration brine lakes.
Anson Resources has mining rights to a lithium brine location in Utah. Posco’s collaboration with Anson Resources will give it an edge over domestic rivals, such as LG Chem, which has supply arrangements with local lithium producers to supply the U.S. market rather than producing lithium themselves.
Posco aims to market the DLE technology it developed in 2016, following the successful operation of the demonstration plant in the United States. The company intends to use this technology to invest in and commercialize undeveloped lithium brine lakes across North America.
Following Bolivia and Argentina, the United States possesses one of the world's greatest lithium reserves, which are contained in vast brine lakes.
In the past year, shares of PKX have lost 19.8% compared with the industry’s 25% decline.
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PKX Rank & Key Picks
PKX currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Agnico Eagle Mines AEM and Avino Silver & Gold Mines Ltd. ASM.
Carpenter Technology currently carries a Zacks Rank #2 (Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 11.1%. The company's shares have soared 157.7% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Agnico Eagle’s current-year earnings is pegged at $1.61 per share. AEM, carrying a Zacks Rank #1 (Strong Buy), surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average earnings surprise being 12.3%. The company's shares have rallied 74.4% in the past year.
Avino Silver, which currently carries a Zacks Rank #1, beat the consensus estimate in each of the trailing four quarters. In this time frame, it delivered an earnings surprise of roughly 104.1%, on average. ASM's shares have rallied 271.5% in the past year.
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This article originally published on Zacks Investment Research (zacks.com).
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POSCO's decision to establish a pilot plant in Utah for lithium production marks yet another strategic move towards securing supply chains amidst the global boom of electric vehicle manufacturing, underscoring their commitment and foresight in addressing future energy requirements.
POSCO's forthcoming pilot plant initiative in Utah represents a strategic move towards lithium production, underscoring the company’s commitment to diversifying its resources and strengthening it position at center of global battery材料 supply chain.
POSCO's upcoming pilot plant in Utah signifies a strategic move into lithium production, further reinforcing the company’s commitment to sustainable energy solutions.
