posco AMERICA

- Breaks ground for the commercial production facility with anannual production capacity of 2,500 tons in Pozuelos, a saline lake in Salta, Argentina
- Establishes afoundation for stable supply of materials by applying POSCO's highefficiency lithium extraction technology and securing the right to use the saline lake
- CEO Kwon Oh Joon promises to collaborate with President Mauricio Macri for mutual development

On February14th, POSCO held the groundbreaking ceremony for the commercial lithium production plant in Salta, Argentina with CEO Kwon Oh Joon and over 20 officials of the state government.

``By applying POSCO's excellent eco-friendly lithium extraction technology to this environment, we will be able to create eco-friendly values and a promising future for both Argentina and Korea,`` said CEO Kwon Oh Joon in the congratulatory address.

The production plant that is to be constructed at Pozuelos Lake (4,000m above sea level)will produce approximately 2,500 tons of high purity lithium for secondary batteries every year, which will be supplied to domestic and overseas manufacturers that produce cathode materials for car batteries.

Considering that 40kg of lithium is needed for batteries per electric vehicle, this amount is worth approximately 60,000 vehicles.

The area of Pozuelos Lake is 106㎢ and is estimated to containabout 1.5 million tons of reserves, serving as one of the most optimumareas of lithium production.

POSCO has secured the right to use the saline lake by signing an agreement earlier this year for materials supply with Lithea (Argentina) which owns the mineral rights at Pozuelos Lake, and has established a stable foundation to enter the lithium sector with economic feasibility based on its proprietary technological skills.

In addition, this plant will apply POSCO's unique technology that has helped to dramatically reduce the time required to extract lithium, previously requiring over a year, through chemical reaction.

The 'high efficiency lithium extraction technology' developed by POSCO in 2010,with the support of the Ministry of Trade, Industry and Energy's energy and resource technology development project, does not require a broad area of salt farm compared to the conventional method of 'evaporation extraction', and is less affected by climate change. Furthermore, it is an economic and eco-friendly technology that can extract the same amount of lithium as the conventional method, even by using a small amount of salt water, as lithium is mostly well preserved when extracting it.

POSCO's lithium business has been directly overseen by the CEO himself since 2010, when he was serving as the director of the Research Institute of Industrial Science and Technology (RIST). Since the development of the proprietary technology, the company has gradually increased the amount of pilot production to 2 tons, 20 tons and 200 tons up to recently, testing the possibility of mass production and economic feasibility.

The world market for lithium has grown from 70,000 tons in 2002 to 170,000 tons in 2014, and it is a promising market that is expected to grow continuouslyto 270,000 tons by 2020. The market for high purity lithium for secondary batteries that will be produced by POSCO is a market with high potential that is expected to account for 135,000 tons by 2020, which represents 50% of the entire market size. However, companies in the secondary batteries industry in Korea are fully dependent on imports of lithium, thereby enduring the hardship imposed by both unstable supply-demand and rising prices.

Nationally in around China, as the sales of electric vehicles are increasing that is promoting popularization of electric vehicles, the lithium market appears to be welcoming POSCO’s entry into the burgeoning business sector. There is still a continued lack of supply and rising pricesof lithium, and global manufacturers of secondary batteries are seeking possibilities to make lithium supply agreements with POSCO even before mass production commences

On February 15th, CEO Kwon will be able to have a private discussion with Mauricio Macri, President of Argentina, the day following the groundbreaking ceremony. Here, Kwon will explain the excellence of POSCO's lithium extraction technology and progress of technological development, and discuss the possibility for constant collaboration with Argentina that is necessary for lithium development.

(Reference) Major developmentsof POSCO's lithium business

2010: First in the world to develop direct lithium extraction technology using chemical reaction
2011: Established and operated the RIST pilot production facility (annual production capacity: 2 tons)
- Achieved 100% of the target process and tested the potential for expansion
2013: Completed pilot production at Maricunga Lake, Chile (annual production capacity: 20tons)
2014: Completed pilot production at Pozuelos Lake, Argentina (annual production capacity: 20tons)
2015: Completed pilot production at Cauchari Lake, Argentina (annual production capacity: 200tons)
2016: Began construction of the commercial production plant at Pozuelos Lake, Argentina (annual production capacity: 2,500tons)
- Will complete construction and begin commercial production within the year

-On February 14th, POSCO held the groundbreaking ceremony for the commercial lithium production plant in Salta, Argentina with CEO Kwon Oh Joon and over 20 officials of the state government. (From left) Executive Vice President Yu Seong (POSCO), President Tadeu Carneiro (CBMM), Ambassador Choo Jong Youn (South Korean Embassy in Argentina), CEO Kwon Oh Joon (POSCO), CEO Choi Sung Min (Lithea), Adviser Alonso (Lithea), Legal Bureau Director Castaneda (Salta government), and Executive Vice President Cho Won Cheol(POSCO PLANTEC) who attended the groundbreaking ceremony are posing for the photo.