Posco, South Korea’s biggest steelmaker, bought 4.75 percent shares and convertible bonds of Australia-based lithium and tantalum producer Pilbara Minerals, in a move to boost its lithium business, the company said Tuesday.

Posco also signed a long-term business agreement to purchase 240,000 metric tons of lithium spodumence concentrate annually from the lithium producer.

Posco-Australia, the steelmaker’s corporate body there, will acquire the shares, the company said.

Demand for lithium has rapidly risen on growing popularity and business expansion of secondary cells, used to power electric cars and smartphones.

Lithium is a key material in secondary cell production.

Posco will be able to mass produce 30,000 tons of lithium carbonate annually from 2020 together with Pilbara Minerals, the company said.

By focusing on its lithium business, Posco is seeking to secure new business opportunities and future competitiveness.

To accomplish its goal to produce over 20,000 tons of lithium annually by 2020, Posco will build facilities in Argentina, the company said.

Posco will invest a total 4.2 trillion won in prospective businesses this year, up 61.5 percent year-on-year, it added. 

By Kim Bo-gyung (lisakim425@heraldcorp.com)