Argentina Lithium: POSCO Wins Up to US$700 Million to Expand Sal de Oro in Salta and Catamarca
ARGENTINA · MINING
Key Facts
—What happened: IDB Invest will finance South Korea’s POSCO Argentina with up to US$700 million to expand production of the battery metal.
—How big: The Sal de Oro project plans plants for 25,000 tonnes of hydroxide and 23,000 tonnes of carbonate per year.
—Where it is: Sal de Oro sits in the Salar del Hombre Muerto, a high-altitude salt flat shared by Salta and Catamarca provinces.
—The catch: The facility is short-term and revolving, and POSCO faces payment complaints from Argentine suppliers.
—The bigger picture: Mining chamber CAEM expects investment under the RIGI incentive regime to jump sharply this year.
—Who pays what: IDB Invest lends up to US$250 million directly, with commercial banks due to provide the remaining US$450 million.
IDB Invest, the private-sector arm of the Inter-American Development Bank, will finance POSCO Argentina with up to US$700 million to expand the Sal de Oro lithium project on the Salta–Catamarca border — the largest international credit yet for Argentina’s battery-metal sector.
A Korean steelmaker’s big Argentine bet
POSCO is best known as one of the world’s largest steelmakers, but its future business is battery metal. Through POSCO Argentina, the Korean group has spent years building a brine operation in the Salar del Hombre Muerto.
That salt flat, more than 4,000 metres above sea level, is shared by the provinces of Salta and Catamarca. It is one of the richest brine deposits in South America’s so-called lithium triangle.
The expansion financed this week covers two plants at the Sal de Oro project. One is designed for up to 25,000 tonnes per year of lithium hydroxide, the other for up to 23,000 tonnes of lithium carbonate.
Both products feed electric-vehicle batteries, but they are not interchangeable. Hydroxide suits the high-nickel cells used in long-range cars, while carbonate remains the industry’s volume standard.
What the US$700 million facility actually is
The financing is a short-term revolving credit facility of up to US$700 million, according to IDB Invest. A revolving facility works like a corporate credit line that can be drawn, repaid and drawn again.
IDB Invest provides a Tranche A of up to US$250 million from its own funds. Commercial banks are expected to supply a Tranche B of up to US$450 million alongside it.
The money supports development, start-up and the gradual ramp-up of production at Sal de Oro. In other words, it bridges the expensive stretch between construction and steady cash flow.
IDB Invest classifies the project as Category A, its highest environmental and social risk rating. That label triggers the strictest disclosure and monitoring standards the lender applies.
The RIGI tailwind behind the loan
The credit lands weeks after the government confirmed the second phase of Sal de Oro under the RIGI, the Incentive Regime for Large Investments. The RIGI offers 30 years of tax, customs and currency stability to projects above US$200 million.
The Economy Ministry’s registry values the Sal de Oro expansion at US$547 million, with 2,335 jobs attached. Battery-metal projects dominate the mining entries approved under the regime so far.
The mining chamber CAEM expects investment under the RIGI to jump sharply this year, as we detailed in our report on the US$39 billion mining pipeline. Chinese producer Ganfeng has also deepened its Salta position, a move we covered separately this week.
Rio Tinto rounds out the picture with more than US$3.9 billion committed across five Argentine assets. Multilateral money, Korean industrial capital and Chinese producers are now all invested in the same three provinces.
The complaints and the audit
The expansion has not been frictionless. Local suppliers have filed payment complaints against POSCO Argentina, according to a BNamericas report published when the RIGI approval was confirmed.
The company has also agreed to an independent audit of Sal de Oro under the IRMA standard for responsible mining. SCS Global Services will carry out the assessment, which covers more than 400 requirements.
Water is the underlying sensitivity in every Hombre Muerto project. Brine extraction competes with fragile high-altitude wetlands, and provincial regulators watch pumping rates closely.
What to watch from here
The first milestone is the Tranche B syndication, because half the facility depends on commercial banks signing on. IDB Invest’s participation is designed to make that easier.
The second is the ramp-up itself, the phase where Argentine brine projects have historically slipped. Nameplate capacity and actual tonnes shipped are rarely the same number in year one.
The third is the lithium price, still far below its 2022 peak. Every new project that reaches production adds supply to a market that has struggled to absorb it.
Frequently Asked Questions
What did POSCO secure for its Sal de Oro project?
IDB Invest will provide a short-term revolving credit facility of up to US$700 million to POSCO Argentina. It funds development, start-up and production ramp-up at the Sal de Oro operation.
Where is Sal de Oro?
The project sits in the Salar del Hombre Muerto, a salt flat shared by Salta and Catamarca provinces in north-western Argentina. The area belongs to South America’s lithium triangle.
How is the US$700 million structured?
IDB Invest lends up to US$250 million directly as Tranche A. Commercial banks are expected to provide a further US$450 million as Tranche B.
What will the expanded project produce?
Two plants are planned: one for up to 25,000 tonnes per year of hydroxide and another for up to 23,000 tonnes per year of carbonate. Both are key inputs for electric-vehicle batteries.
What is the RIGI and why does it matter here?
The RIGI is Argentina’s Incentive Regime for Large Investments, offering 30 years of tax and currency stability for projects above US$200 million. Sal de Oro’s second phase, valued at US$547 million in the official registry, was recently confirmed under the regime.
Connected Coverage
We mapped the full RIGI numbers yesterday in Argentina’s mining pipeline under the RIGI incentive tops US$39 billion and covered the Chinese expansion in China’s Ganfeng locks in a three-project Salta megadevelopment. Across the border, Chile took a different route in Chile’s first private CEOL: a US$70 million lithium-from-waste project.
Sources: IDB Invest, La Nación, El Cronista, El Tribuno, Bloomberg Línea, BNamericas, Responsible Mining (IRMA).
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