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.
Zacks Investment Research
Image Source: Zacks Investment Research
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
POSCO (PKX) : Free Stock Analysis Report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
Avino Silver (ASM) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
