South Korea steel giant Posco eyes off WA critical minerals sector through Pilbara Minerals venture

South Korea’s biggest steel manufacturer is eyeing off WA’s critical minerals to shore up its supply chain and make batteries needed to power the global transition to electric vehicles. Speaking at an Australia-Korea Business Council forum in Sydney on Wednesday, steel giant Posco and Pilbara Minerals outlined a “slam dunk” lithium joint venture deal struck between the pair late last year will help supply within the battery market, which is partly clogged due to China’s persistent COVID-19 lockdown strategy. Posco wants to use the supply agreement as a springboard towards its transformation into the third-largest cathode and anode battery supplier in the world. Pilbara chief executive Dale Henderson said overseas investors were eyeing off WA minerals as part of the push to decarbonise the global economy. Mr Henderson said the strategic position of battery hubs of China, Japan and South Korea were attractive, while also playing up Australia’s geopolitical stability. “Western Australia is incredibly well-positioned to capitalise,” he told thewest.com.au. “We’re such an incredible country in terms of resource-rich, stable jurisdictions, solid track record of mining performance and constant mineral concentration. The world needs a lot of critical minerals to deliver on all of the renewable energy technologies which are being ushered into existence.” Posco’s investment in batteries and low emissions technology is part of a concerted effort to decarbonise its operations. Mr Henderson said Posco had approached Pilbara with a clear strategy to de-risk the business. Posco Australia managing director Ben Kim said critical minerals mining in Australia was vital to the company to ensure fully integrated battery manufacturing had ample supply of raw materials. “Whether it is steelmaking or battery making, we need raw materials from Australian. So mining is critical,” Mr Kim said. Posco pointed to a greater need to diversify the battery market which has become too reliant on Chinese producers — a position Mr Kim believes needs to change to bring certainty to the global economy. “Maybe geopolitics can change and China will ease their tensions and ... come up with amicable solutions with the US,” he said. “But as a businessman — I mean as the player in the field — we’re not hoping for the best. We have to expect the worst. If China’s situation continues, the US Inflation Reduction Act is in place strongly, then we need our value chain safe from that.” The Australian Government’s foreign investment stance was front and centre at the forum, along with the need for a better regulatory environment to enable an inflow of overseas capital from investors. Mr Kim said the Federal Government had a bad track record in supporting local manufacturing, an area he believed needed reform so big companies could establish domestic production. He referenced the demise of local car manufacturing in Australia and the lack of support from the government. “If we want to build some downstream processing plant in Australia ... you do need to set up manufacturing facilities,” Mr Kim said. “If you want to set up a plant there has to be something from the government to participate.” Mr Henderson said there was a lot of anecdotal evidence of more investor activity within WA’s critical minerals sectors, saying the number of business trips from foreign businesses was rapidly increasing.