The flag of South Korean steelmaker Posco (Yonhap)
Posco, the world's fifth-largest steelmaker by output, said Thursday it has agreed to buy a 15 percent stake in Black Rock Mining for $7.5 million.
The deal will pave the way for Posco to secure graphite fines, a material required to make anodes, according to the steelmaker.
Still, Posco said no specific date has been set for the formal signing of an offtake agreement with the Australia-based graphite producer.
An anode is a key material in a battery that preserves lithium coming from the cathode and generates electricity while releasing lithium.
Black Rock Mining has a 100 percent interest in the Mahenge Project in Tanzania, which hosts a multi-generational graphite resource.
The deal comes as Posco is pushing to lower its heavy reliance on China for graphite to less than 50 percent in the medium to long term.
Currently, Posco imports all of the graphite it uses to produce anodes from China.
Posco has said it plans to import 220,000 tons of lithium and 100,000 tons of nickel per year by 2030 to ensure its affiliate, Posco Chemical Co., can produce 400,000 tons of cathodes and 260,000 tons of anodes by 2030.
A cathode is one source of lithium in a lithium-ion battery and is also a key component for electric vehicle (EV) batteries.
Posco Chemical has said it plans to supply cathodes to EV battery facilities in South Korea, Europe, China and the United States.
The EV battery market has been on a roll as automakers around the world race to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming. (Yonhap)