<Special Documentary> Resource Wars : Battles without Gunfire The global war to hold sway over resources has reached its peak. World affairs are unstable, and oil prices are reaching unprecedented highs daily. The prices of essential resources are also soaring. Technological developments like the smartphone and electric vehicles have only served to heighten he war over resources. Countries that are ahead of others surely have more to gain than the others. Korea is one of the world’s top technology powerhouses but is no less affected by this war. The area we will visit is in the highlands, 4,000 meters above sea level and two hours by plane from the capital Buenos Aires and another 40 minutes by light aircraft. Hombre Muerto is a salt lake located at elevation, where it’s hard to breathe. Meaning “dead men,” this area was dead land before the development of the salt lake. Now it is home to a valuable resource. That resource is lithium, sometimes referred to as “white oil.” Lithium is currently one of the hottest resources in the world. This is because it is vital to secondary batteries, a key technology in the future mobility era. Let’s imagine how our current lives would be if lithium-ion batteries weren’t developed Your mobile phone would have a battery around five times bigger than your current battery and it would run out in half a day. The batteries in electric vehicles are on the bottom of the car, requiring more vehicle height. Other than that, general consumers don’t notice a difference. Let’s say that lead-acid batteries were used instead for an electric vehicle with the same performance. Then the Carnival would have to be entirely filled with batteries, leaving only room for the driver. Lithium is the most lightweight metal on earth and has a high volumetric energy density A company in Korea is expediting its acquisition of resources. To take on such an endeavor there is one thing you need to be sure of. That is, your health. Sudden exposure to higher elevations result in serious health issues. Your oxygen saturation is low. Are you having trouble breathing? My heart was beating fast, but I didn’t feel like I lacked oxygen.
Do you have a headache? No headache.
Do you feel dizzy? No. I suggest you go to the medical facility for some oxygen. Most people who come to this camp develop altitude sickness due to the elevation, due to the elevation, and experience hypoxia and headaches. Although the symptoms are not always the same, most people who come here for the first time suffer from altitude sickness and find it difficult to adapt. The production crew also had a difficult time. They were able to start filming only after receiving oxygen and adapting to the environment. There are occasionally people who have serious symptoms that require a high-pressure oxygen chamber. Hombre Muerto has harsh conditions for humans but is rich in resources. What grabs our attention most here is the massive pond. The pond is where brine is stored to extract lithium You can think of it as a salt pan. Of all the salt lakes in Argentina, this one has the brine with the highest lithium concentration. There is white salt in the pond. People usually think this is lithium, but it is actually salt, an impurity. The lithium is actually inside the water. How much lithium is there in this water? For example, if we filled a one liter bottle then there would be around 4 grams of lithium. In all, the amount of lithium in the pond is worth around KRW 50 billion. One pond has a width of 300 meters, a length of 167 meters, and height of 2 meters, and stores around 35 thousand tons of brine. The ithium that can be extracted from a single pond is worth around KRW 50 billion. Only one pond is currently in operation, but three ponds will be operated soon, and the amount will reach an unbelievable sum. How was this salt lake created at an elevation eight times the height of the L Tower, the tallest building in South Korea? There is a region called the Lithium Triangle in Latin America.
It is around the borders of Chile, Argentina, and Bolivia. These three countries account for 74% of the world’s lithium carbonate reserves. This region has unusually large lithium reserves because of its geographical characteristics. In the formation process of the Andes that resulted from an encounter between the Pacific Plate and the South America Plate, seawater became surrounded by the mountain to create salt lakes. A confined geological structure was created that trapped the water in. The water became concentrated over a long period, creating salt lakes with extremely high concentration levels. Lithium is one of the most important resources in modern industry. Secondary batteries were important in the past, but they have now gained greater importance. Not being able to use electricity while on the move was natural for us in the past. We used electrical outlets. Then mobile phones and smartphones were developed, resulting in the need to use electricity anywhere, anytime while on the move. As a result of the rapid development of technologies, secondary batteries have become essential. It is only natural that the value of lithium, a material in these batteries, to go up. A lithium-ion battery is a secondary battery that can be reused several times through recharging and electric discharge. Offering the highest level of efficiency, lithium-ion batteries are used in most industries, ranging from smartphones and laptops to electric vehicles. A lithium-ion battery’s main components are cathode materials, anode materials, electrolytes, and separators. Lithium ions move from the cathode materials to anode materials through the electrolyte during charging. When lithium ions move from anode materials to cathode materials, energy is generated. When this energy is used up, electric discharge takes place. Cathode materials determine the battery’s main functions, such as capacity and output. Lithium, nickel, cobalt, and manganese are used as cathode materials. Accounting for more than half, lithium performs an important role. As reflected in the name, lithium secondary batteries cannot work without lithium Lithium is the most important. In terms of price, lithium accounts for at least 15 to 20% of costs, making lithium the most important material. As long as lithium-ion batteries exist, lithium is a material that cannot be replaced. Other materials can be slightly changed.
However, lithium is the charge carrier that serves as the basis of lithium-ion battery operation. As such, lithium is an essential resource. In particular, the growth of the electric vehicle market had a crucial impact on skyrocketing lithium prices, which rose by more than 500% in the past year. Tesla CEO Elon Musk mentioned the possibility of directly entering the lithium business which made headlines. Amid worldwide competition to secure lithium, South Korea views lithium as something more valuable than simply a resource. It is said that semiconductor technologies drove Korea’s growth over the last 20 to 30 years. The super gap in semiconductor technologies significantly facilitated exports and domestic industries. The secondary battery industry is expected to become Korea’s next semiconductor industry, driving the nation’s growth. Korean companies industries that use batteries, such as mobile phones and electric vehicles, continue to raise their market share based on the world’s most advanced technologies. For this reason, we expect batteries to perform roles that semiconductors played over the last 30 years in the next 30 years. Secondary battery is viewed as the rising star of the Korean industrial sector that will take over semiconductor roles. Korea is one of the world’s leaders in technology and market share, but failure to secure lithium may lead to risks. As you are well aware, batteries are referred to as the heart of electric vehicles, and Korea ranks the world’s No. 1 or 2 in battery manufacturing competitiveness. Stable supply of countless metals is necessary for manufacturing batteries. They are like oil and gas needed for internal combustion engine vehicles in the 20th century. Unfortunately, Korea has only small reserves of key minerals of the 21st century. It is almost 100% dependent on overseas development and import. In a way, Korea’s reserves of key minerals of the 21st century are in greater shortage than oil and gas of the 20th century. Securing resources that are like a lifeline to Korea’s industry There is a company in Korea that recognized the importance of securing resources earlier on. Well-known to us as a steel company, POSCO entered the secondary battery material business. POSCO began investing in iron ore and raw materials in the 1980s. Its experience in the steel business underlined the importance of securing resources in the manufacturing industry. For secondary batteries, POSCO recognized the importance of the business of nickel and lithium and entered the business. One of the outcomes is the company’s development of a foundation for lithium production through the Hombre Muerto salt lake. The company acquired the salt lake by investing KRW 300 billion in 2018 after many twists and turns. We began work on acquiring the salt lake in 2016. We reviewed two to three salt lakes for acquisition. We lost a chance to acquire a salt lake to a Chinese company that offered a slightly higher price at the last minute. Back then, Chinese companies acquired salt lakes without even conducting adequate reviews. We became concerned that we might fail at securing resources while waiting. This is why we decided to acquire a salt lake in an extremely short period of six months in 2018. This led to our successful acquisition of a salt lake in Argentina. The company’s success with securing resources was initially met with criticism. People wondered why we had to acquire the lake. I believe this resulted from a lack of understanding of resource development. Resource development may fail but can also generate considerable profits when it succeeds. Also, this is a matter that we cannot put a price on. The company’s possession of lithium means that we secured an extremely important raw material for the country and for electric vehicles. for the country and for electric vehicles. This is truly a priceless achievement. Four years have passed, and circumstances are completely different. Lithium prices have recently been continuing an upward trend. Also, this salt lake’s lithium reserves are six times more than initially expected. It was good news after good news. Confirmed reserves at the time of acquisition in 2018 were around 2.2 million tons. We continued chlorine and lithium exploration and carried out concentrated exploration. We identified 13.5 million tons in official lithium reserves at the end of 2020, which is more than six times the initial figure. This accomplishment was the result of tenacious efforts. Lithium is from brine that is pulled up from underground by digging a hole hundreds of meters deep in the salt lake. A company from a different country previously explored this area, but only to the depth that the strata could be easily penetrated. The company did minimum exploration to reduce costs. However, the Korean company went further. There was a company before us. That company also thoroughly examined this area. That company drilled around 120 meters and it stopped there. This is because there were many strata with small brine reserves and an extremely low flow rate, which signifies a very low capability to emit brine. So the company stopped there. Aiming to explore to greater depth in this area, we explored this region and passed by the bad strata located 100 to 150 meters below the surface of the earth to discover a stratum with rich reserves and a good flow rate to emit brine. There is another episode in which the company demonstrated special insight. Before the acquisition, I came out here and conducted a due diligence and a field survey. I reviewed a report report that indicated the existence of salty water, but not brine. This led me to become convinced that the salt lake does not end there but extends some kilometers to the area we are standing. The company from a different country that explored the area earlier used only a basic approach for exploration. It thought that it could find lithium brine only in flat areas where salt crystals could be seen. In fact, in the process of finding residential water, the company discovered salty water in the alluvial fan but left it alone because it was not fresh water. We picked up an idea from this discovery. We considered the possibility that what we can see is not the entire salt lake and the whole area below ground is also salt lake.
This idea hit the mark. With a six-fold increase in reserves and rising lithium prices, the company can anticipate sales that are dozens of times greater than expected at the time of acquisition. Lithium is concentrated in a pond first to extract lithium from brine. Other companies can extract lithium only when lithium is concentrated to at least 10 to 16 grams per 1 liter of water. However, we have a technology that enables lithium extraction when lithium is concentrated to only 4 grams. The brine that is concentrated in a pond flows into a plant for lithium production. Brine contains lithium and several impurities, which are filtered out through a chemical reaction. This is followed by a drying process to result in white powder lithium. This is lithium, referred to as white oil. This is one ton of lithium phosphate.
With one ton, 25 electric vehicles can be made. Considering the current market price, it is worth around USD 50 thousand or KRW 60 million. Although lithium is currently produced only at a pilot plant, the amount produced is considerable. Total production volume has reached a whopping 1,100 tons, valued at around KRW 70 billion based on the current market price. Once an official plant is completed by 2024, the company plans to produce an annual 100 thousand tons of lithium which can be used to manufacture 2.5 million electric vehicle batteries. South Korean-made lithium will be produced. This is a cathode material plant in Gwangyang, South Jeolla Province.
It produces cathode materials of secondary batteries. Cathode materials are a key factor that determines battery functions. In cathode materials, lithium performs a large role, accounting for half of the amount of raw materials used. This plant will be supplied with lithium that is produced from the salt lake in Argentina starting in 2024. We rely on imports for at least 90% of the lithium that we currently use. Once we are supplied with lithium that is produced from the salt lake in Argentina, our lithium self-sufficiency will reach 100% as of 2024. These types of efforts are needed. We simply relied on and generated profits only from the manufacturing industry. If we can move up the value chain and start upstream,
go through all middle processes, and export to countries across the globe and dominate the field, then it will become a good industry that will serve as a new source of profits. In the early hours of the morning before sunrise, Salta Airport is already bustling with people. This is the day employees on ground rotate shifts with employees high in the mountains. Hello. Employees rotate shifts each week, and adapting is not easy. It’s slightly different for everyone.
I went up more than 30 times, but I still have a headache and don’t feel too good on the first day. Employees commute by a light plane. The high-altitude area that is 4,000 meters above sea level is around 400 kilometers away from here. It takes too long by car and therefore a light plane is used. They arrive here after a week. They are greeted by their colleagues, who were waiting to rotate shifts.
They share the knowledge of how difficult the work here is. It’s been almost two years since I first came here. I’ve adapted to the environment so I don’t have oxygen saturation or breathing issues, but I still have difficulty with chapped lips. We turn the heater on because it is winter and it gets dry. Other than such matters, there is nothing really. I’m fine now. Thank you.
You’re welcome. Thank you. We worked hard for a week and remain healthy. We’ll go down, get some rest, and come back up. They rest for a week after working throughout the week. A time of relaxation down from the mountains will become a driving force for the following week. The day begins here with a morning assembly. Located completely opposite from Korea, this region is in the middle of winter, with temperatures going down to 30 degrees below zero. The biggest issue these days is naturally the weather. It is 11 degrees below zero right now, and it goes down to 20 degrees below zero during winter. Pipes froze and burst on many occasions last year. I’m going to mainly check on those areas. This place is extremely sensitive to freeze and burst incidents since it produces lithium by using brine. If a pipe that brine flows through gets frozen, lithium production runs into a huge issue. This is why people here especially tense up when winter arrives. There’s a report that a residential water pipe froze. It froze here, creating ice. It froze up to here, so no water is flowing. There is ice stuck here, making the pipe freeze.
They fortunately overcame the crisis. Although brine overflows here, water used for washing and drinking is in extreme shortage, making it impossible to obtain a single drop.
Trucks are used to bring drinking water from an area around 400 kilometers away. It seems like water is in great abundance, but it is also the rarest. There is an additional exploration today. The company first came here four years ago, but exploration is still one of the most important tasks. Considerable lithium brine production is needed for commercialization. Areas throughout this extensive salt lake differ in the brine’s lithium concentration, differ in impurity concentration, and substantially differ in how much brine can be extracted. We will appropriately combine factors that were confirmed through interpretation. To ensure stable, high-quality lithium brine production during the next 20 years, at the very least, we plan to carry out development and exploration activities. Hombre Muerto is one-third the size of Seoul’s area. Continuous exploration of this area is important for long-term, stable lithium supply, in addition to the currently-acquired amount. Drilling is taking place here to check a different stratum. Drilling involves digging a hole deep underground to investigate a stratum’s structure or condition. One of the characteristics of drilling here is that diamond drilling is used. Using a diamond enables smooth digging, irrespective of underground obstacles, making it effective for adequate identification of strata. Drilling is extremely important in identifying the brine flow velocity of each stratum. Brine flows relatively easily in a stratum that is loose rather than dense. According to strata conditions, drilling holes are created in locations where brine can be efficiently extracted. This is extremely important to obtain more brine more quickly and easily. Strata that are obtained through drilling are stored as samples for more detailed research. Brine is pulled up only after identifying each stratum’s characteristics. Persistent, thorough explorations led to many good outcomes. Nobody knows how these continuous exploration activities will change our future. Monitoring protection of the natural environment is as important as exploration. The greatest weakness of resource development is the resulting destruction of nature. For this reason, efforts to preserve the surrounding environment as much as possible are a fundamental and essential condition for resource development. POSCO is located in Hombre Muerto, which is an extremely important foothold in Salta. Much progress was made with the lithium project. Two commercial lithium hydroxide and lithium carbonate business approvals were obtained through open discussions and joint surveys on environmental issues related to improving the daily life conditions of local natives. The state government recognizes that these are extremely important projects. This is a very important challenge for me personally. Plant construction will begin or has begun this year. As a citizen of Salta, I have high expectations for the successful development of the project. Thanks to eco-friendly technologies and activities to preserve the natural environment, many animals live in harmony with people here. To carry out development projects in developing countries that are rich in resources, socially-responsible mining and socially-responsible production methods are important. We need to develop eco-friendly technologies and also effective social programs that enable us to form a consensus with local residents. People say that resource development is a comprehensive project. They say that business management is most important, rather than a specific technology or field. It’s more than simply going to the site and digging. Overall factors need to be well-established. The country needs to allow exports. Diplomacy and good agreements are needed. The Korean company secured lithium by researching Hombre Muerto in Argentina and achieved great outcomes. It is accelerating the completion of other tasks to achieve self-sufficiency of raw materials needed for secondary batteries that will lead the Korean industrial sector. In addition to lithium, we are securing nickel. We secured nickel in New Caledonia and Australia, and are reviewing additional acquisition of resources in Indonesia and the Americas. What progress have we made with the graphite anode material business? In case of anode materials, securing natural graphite materials is extremely important. We secured natural graphite materials in Tanzania in Africa. Securing resources is very important to companies as well as to the entire nation. It will be extremely regrettable if we are unable to develop the nation’s key industries, such as the secondary battery industry, due to resource shortage. Securing resources is the foundation of national industry. For this reason, private companies like us will do our best to acquire resources. Raw materials in industry are like rice to humans. We will starve without rice. Likewise, companies will have to stop their plants if they are not supplied with raw materials. This is why cost is not important when it comes to overseas resource development. Securing resources has the greatest significance. Resources are essential for our lives.
Countries around the world are fighting desperately for resources. As a resource-poor country, Korea was impacted by external factors, but now has various available paths. Now is the time for the country and companies to actively work on securing resources. It is time for Korea to win the fierce resource war.
