Posco's Argentina lithium bet gains momentum as president touts 'Sal de Oro' project

Posco Holdings' lithium investment strategy in Argentina is drawing renewed attention after President Lee Jae Myung personally referenced the company's local project by its name, "Sal de Oro" — Spanish for "golden salt" — ahead of his state visit to the country.

Writing on X, formerly Twitter, on June 30, Lee said he had heard that the lithium development project a South Korean company was pursuing in Argentina was called "golden salt," and expressed hope that the summit between the two countries would yield results "as precious and brilliant as gold."

It is rare for a sitting president to publicly name a specific company's overseas resource development project. Resource cooperation was a key agenda item at the South Korea-Argentina summit held Thursday, as securing critical minerals including lithium has emerged as an economic security priority.

Posco Holdings has said it will channel investment funds secured through its corporate value enhancement plan into the lithium business, while also accelerating efforts to build an annual production capacity of 100,000 tons in Argentina.

Argentina forms the "Lithium Triangle" with Chile and Bolivia — the world's largest lithium reserve zone. Holding the world's fourth-largest lithium reserves, the country has drawn intensifying investment competition from global automakers and battery manufacturers.

Posco Holdings entered the lithium business in earnest in 2018 when it acquired mining rights to the Hombre Muerto salt flat in northwestern Argentina. It further expanded its foothold this year by securing rights to the Hombre Muerto North block, bringing its total brine lithium resources in Argentina to 15 million tons.

Operations are gaining traction. Posco Holdings completed its Phase 1 brine lithium plant, with an annual capacity of 25,000 tons, in 2024. Rising utilization rates and growing sales drove the operation to its first monthly profit in March, and the second quarter marked the first time the business posted a profit on a quarterly basis.

Further investment is on the way. Posco Holdings is nearing completion of its Phase 2 plant, also with an annual capacity of 25,000 tons. With the Argentina brine lithium business turning an operating profit this year, the company plans to bring forward Phase 3 and Phase 4 investment as well.

By 2033, Posco Holdings aims to establish an annual production capacity of 173,000 tons — combining 100,000 tons of brine lithium and 73,000 tons of hard-rock lithium — and break into the ranks of the world's top five lithium producers. The two-track strategy of developing both brine and hard-rock lithium simultaneously is designed to reduce dependence on any single raw material and provide stability against price swings.

In addition, the company plans to demonstrate direct lithium extraction (DLE) technology in the United States — a process that can utilize even low-grade brine. It is targeting a demonstration plant ground-breaking in 2027 and commercial validation in 2028, with the aim of securing additional lithium resources and lowering production costs.

This lithium expansion sits at the core of the group's investment strategy. In its "2026 Corporate Value Enhancement Plan" announced June 30, Posco Holdings said it would invest a total of 29.1 trillion won ($20.2 billion) from 2026 to 2028, allocating 4.1 trillion won to strategic resources and 2.4 trillion won specifically to lithium — both brine and hard-rock.

At a second-quarter earnings conference call held the same day, the company said it plans to reinvest 90 percent of the roughly 3.5 trillion won it expects to raise — through measures such as selling stakes in listed subsidiaries — into lithium and other new-growth businesses.

Posco Group Chairman Jang In-hwa said at last month's investor day that "now, as external uncertainty deepens amid supply chain instability and accelerating low-carbon transition, is precisely the time to create new growth opportunities through bold innovation in our business portfolio," adding that the group would "lead the way in strengthening national industrial security and supply chains by expanding our business domain from steel and materials into resources."

Business conditions are also expected to improve. Posco Holdings is awaiting approval — the first for a South Korean company — under Argentina's large-scale investment incentive regime known as RIGI. The program offers tax and regulatory benefits to companies investing in strategic industries such as energy and mining, including reduced corporate taxes, tariff exemptions and the right to retain foreign currency earnings from exports. Approval would significantly boost the profitability of the local lithium operation.

Industry observers expect the summit diplomacy to have a positive effect on Posco's operations in the country. With the lithium business turning profitable, production expanding and RIGI approval all advancing simultaneously, the president's direct mention of the "Sal de Oro" project has elevated Argentina's lithium operation from a corporate investment into a symbol of South Korea's broader critical minerals supply chain strategy.

"Posco Holdings is a rare company that simultaneously holds premium brine assets in Argentina and a competitive position in non-China supply chains," said Kang Min-a, an analyst at Daishin Securities. "If RIGI approval coincides with the global supply chain realignment, the value and competitiveness of its lithium business will stand out even more."