Pilbara Minerals has exercised an option to enter a joint venture to manufacture battery-making materials with steelmaker Posco by setting up a lithium processing facility in South Korea.
The Australian miner said in a statement that it will have up to 30 per cent participation in the facility, which will have a capacity of up to 40,000 kilo tonnes per annum of lithium carbonate equivalent.
Pilbara said lithium hydroxide will be produced at the facility using Posco's patented PosLX purification process.
Lithium hydroxide is a key component in making batteries.
The miner has been vying to increase its output of battery chemicals due to growing demand for electric vehicles around the globe.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Pilbara in January said it agreed to sell about 240,000 tonnes of lithium concentrate a year to Posco.
Several Australian lithium miners, including Pilbara, also have supply agreements with Chinese auto and battery makers as China builds out its electric vehicle capacity faster than anywhere else in the world.
Pilbara and Posco intend to complete construction of the plant, which will be located in the Gwangyang Free Economic Zone, by late 2020.
Pilbara shares were worth 71.5 cents before the start of trade on Monday, up about 15 per cent in 2019.
