South Korean company Posco Holdings is considering investing in the exploration, development and commercialization of lithium in Alberta.
The company — which is best known for steel production but also invests in minerals, energy and more — signed a memorandum of understanding this week with provincial Crown corporation Invest Alberta.
Under the terms of the agreement, Posco will begin exploring prospects for lithium investment in Alberta, while the province will support the Korean company’s ambitions by helping them navigate the acquisition of mining rights as well as regulatory and tax-structure requirements.
“Through our strategic collaboration with Invest Alberta, Posco Holdings is not only advancing our commitment to securing lithium but also reinforcing our standing in the global secondary battery supply chain,” said Kyung Sub Lee, Posco Holdings executive vice-president, in a news release.
“When we make these public types of announcements, it’s a clear signal to the market that says Posco is highly interested, highly engaged,” said Rick Christiaanse, chief executive of Invest Alberta.
“They are well advanced, so it’s really now just a question of them picking the right projects and then moving forward.”
The development is the first public indication that major foreign investors are eyeing Alberta’s lithium resources.
Lithium, a light metal, is in demand around the globe right now because it is a key component in electric vehicle batteries.
Currently, the world’s biggest lithium producers are Australia, Chile and China. However, it has long been known that Alberta, a major oil-and-gas producer, is also home to one of the world’s largest underground lithium deposits.
Until recently, there has been little interest in developing this deposit, but the growth in electric vehicles and exponential demand for lithium-ion batteries has changed that.
Lithium is now a key focus of the government of Canada’s $3.8-billion, eight-year critical minerals strategy, which aims to increase domestic extraction and production of the metal along with other previously under-developed resources such as cobalt, copper, titanium and zinc.
A vial of lithium, at the E3 Lithium pilot plant near Olds, Alta. (Jeff McIntosh/The Canadian Press)
The Government of Alberta has also identified lithium as a potential way to diversify its oil-and-gas-based economy.
One Calgary-based company, a publicly traded junior resource company called E3, has developed its own technology to extract the lithium that occurs naturally with Alberta’s oilfield brines.
E3 holds the mineral rights to an estimated 16 million tonnes of lithium resource, and hopes to open a full-scale commercial plant in the central part of the province by late 2026.
But Christiaanse said Posco brings global heft to what is still a very new and burgeoning industry for Alberta. He said the company also has the capital and expertise to invest up and down the entire lithium supply chain.
“What we’re really looking for at the end of the day is the end-to-end supply chain discussion, so it’s not just about mining the resource … it’s about producing it, refining it, all the way to getting it ready for consumer products,” Christiaanse said.
“That’s where the real value-add is for Canada. If we just export the minerals out of here, that’s not really a win in our minds.”
Posco has been actively seeking to grow its lithium footprint, first in 2018 by acquiring brine tenements in Argentina, where it is currently constructing commercial brine lithium plants with a total capacity of 50,000 tonnes per year.
Additionally, Posco has agreed to establish a joint lithium venture with Pilbara Minerals in Australia and is also constructing a commercialization plant in Korea for hard-rock lithium with a capacity of 43,000 tonnes per year.
Christiaanse said while Posco is the first major foreign company to publicly announce its interest in Alberta lithium, he said it won’t be the last. He described the surging demand for lithium globally as akin to a “gold rush,” and said the province has been in talks with a number of other potential investors from around the world, in particular from Asia.
“There are others, both in Japan and in Korea, that are on a similar path [to Posco] and we anticipate this being the first announcement of many,” Christiaanse said.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
