At 4,000 meters above sea level in the Andes highlands lies the Hombre Muerto salt flat — Spanish for “Dead Man.” On this barren land where even breathing is a struggle, POSCO Group has cultivated the foundation for self-sufficiency in lithium, the “white petroleum.” Arriving on the 19th (local time) after a 35-minute flight by light aircraft from Salta Province, Argentina, emerald-green artificial evaporation ponds stretched across the ochre wasteland. This is a massive “lithium salt farm” where lithium brine pumped from underground is concentrated by sun and wind.
POSCO Argentina posted an operating profit of 11 billion won (approximately $7.9 million) in the second quarter, marking its first quarterly profit since entering the business in 2018. The turnaround was driven by increased production and a recovery in lithium hydroxide prices, which had plunged to $8,000 per ton (approximately 11 million won) in July last year but have recently rebounded to around $18,000 (approximately 25 million won).
POSCO Holdings acquired the salt flat’s primary mining rights in 2018 for $280 million (approximately 390 billion won), then purchased additional northern rights in April this year for about $65 million (approximately 90 billion won). The total mining concession area now spans 287 square kilometers — roughly half (47%) of Seoul’s land area. The underground brine is estimated to contain 15 million tons of lithium, enough to produce batteries for approximately 300 million electric vehicles. Total capital deployed to date stands at approximately $2.3 billion (approximately 3.2 trillion won).
The decisive reason for planting its flag here is lithium concentration. The brine contains an average of 921 mg of lithium per liter — the second-highest concentration in the world after Chile’s Atacama salt flat. Higher concentration means less brine and energy are needed to extract the same amount of lithium, making concentration synonymous with cost competitiveness. In fact, raw material costs account for less than 1% of POSCO Argentina’s manufacturing costs.
The production process resembles traditional salt farming. Brine is pumped from wells 450 meters underground and spread 30 centimeters deep across ponds divided into terraced sections like rice paddies, then evaporated over four months as it moves through multiple compartments. During this process, lithium concentration increases roughly fivefold. Phosphoric acid is then added to selectively extract lithium, producing lithium phosphate powder. The material is then sent to the downstream plant in Güemes at 1,200 meters above sea level, where high-purity refining and bipolar electrodialysis (BPED) processes yield battery-grade lithium hydroxide for electric vehicles.
This process was developed in-house by POSCO Holdings specifically for the local brine characteristics, reducing production time by two-thirds from the original timeline of over a year. Park Hyun, head of POSCO Argentina, said: “This process was the only one of its kind in the world at commercialization, and now Chinese companies are copying it.”
The business was not smooth from the start. Lithium prices plunged due to slowing EV demand and oversupply, resulting in an operating loss of 54 billion won (approximately $39.0 million) in the first quarter of last year. In winter, daily evaporation drops to half of summer levels, and operations halt entirely when winds exceed 100 kilometers per hour. Some days bring gusts up to 153 kilometers per hour. Lee Se-jin, Chief Financial Officer, said: “This is a business that must adapt to nature. When unexpected rain falls, the brine gets diluted — just looking at the sky makes me anxious.”
Support from the Argentine government has also been a crucial safety net. POSCO Argentina received approval last month under Argentina’s Large Investment Incentive Regime (RIGI) for the upstream process of its second plant. Under the program, the corporate tax rate drops from 35% to 25%, and export proceeds can be held entirely in foreign currency starting four years from now. Lithium carbonate export taxes will also be exempted after three years, with these conditions guaranteed for 30 years. POSCO Holdings estimates the benefit at approximately $900 million (approximately 1.2 trillion won).
As production grows, sales channels are expanding. POSCO Argentina has agreed to supply up to 25,000 tons of lithium to SK On over three years starting this year. More than half of this year’s production target of 17,000 tons already has confirmed buyers.
The next goal is establishing a 100,000-ton annual production system in Argentina. Plants 1 and 2 will each produce 25,000 tons of lithium hydroxide annually for premium EV ternary (NCM) batteries, while Plants 3 and 4 — scheduled for completion in 2030 and 2033 respectively — will each add 25,000 tons of lithium carbonate. The strategy targets demand for AI data center energy storage systems (ESS) and lithium iron phosphate (LFP) batteries for mid-to-low-priced EVs using lithium carbonate. The core plan is to sell Argentine lithium directly to customers or feed it into POSCO Future M’s cathode material production, building a self-sufficient supply chain from raw materials to finished materials.
POSCO Holdings projects an operating margin of 41% in 2028 if lithium prices hold at $20,000 per ton (approximately 28 million won), and 22% at $15,000 (approximately 21 million won). Park said: “Unlike companies that buy concentrate, we have direct access to brine resources, so at those price levels we have little to worry about.”
The growth of local talent is also key to business sustainability. Of POSCO Argentina’s 623 employees, only 63 are Korean expatriates. The company is developing managers and engineers among the remaining 560 local employees, and has opened its own tech center to teach on-site skills including welding, piping, and electrical work. Facundo Valderrama, a local employee met on the high plateau, said: “Thanks to POSCO’s lithium business, people in the area have found jobs, and as the surrounding supplier companies grow, the whole town is coming back to life.”
Meanwhile, competition among nations over critical minerals is intensifying. China’s Zijin Mining — whose largest shareholder is a state-owned enterprise — acquired a Canadian resource company for approximately $770 million (approximately 1.1 trillion won), securing rights to a high-concentration salt flat in Argentina. The Export-Import Bank of China lent up to $331.5 million (approximately 460 billion won) — 85% of the contract value — at 3% annual interest for construction of a 300 MW solar power complex in the lithium development area. China currently accounts for approximately 70% of global lithium refining and processing volume.
Japan’s public agency, the Japan Organization for Metals and Energy Security (JOGMEC), shared risk by covering half of Toyota Tsusho’s early-stage exploration costs at the Olaroz salt flat in Argentina and providing debt guarantees for development loans. According to the International Energy Agency (IEA), advanced-economy governments including the United States, Japan, and Europe have committed approximately $65 billion (approximately 90 trillion won) to critical mineral projects — more than four times the 2023 level.
South Korea, by contrast, faces a conspicuous support vacuum. When the Korea Resources Corporation was merged into the Mine Reclamation Corporation in 2021, the function of direct overseas resource development investment disappeared. General mineral overseas investment by Korean companies also fell more than 70%, from $1.9 billion (approximately 2.6 trillion won) in 2014 to around $500 million (approximately 690 billion won) in 2021. Special loans for corporate exploration costs have been allocated entirely to oil and gas projects over the past five years, with zero support for critical minerals. This year’s special loan budget is 67.5 billion won (approximately $48.7 million) — one-fifth of what POSCO Holdings spent on a single mining concession. The South Korean government is discussing raising the special loan support ratio from 50% to 70% of project costs, restoring the Mine Reclamation Corporation’s overseas direct investment function, and establishing a resource security fund.