BID Invest provides up to $700 million credit line to Posco Argentina to expand lithium production

en.Wedoany.com Reported - The Inter-American Development Bank's investment arm (BID Invest) has approved a short-term revolving credit facility of up to $700 million for Posco Argentina to support the development and production expansion of the Sal de Oro lithium project at the Hombre Muerto salt flat, located between the provinces of Salta and Catamarca.

The financing is divided into two tranches, A and B: Tranche A, provided by BID Invest, amounts to up to $250 million; Tranche B, provided by commercial banks, amounts to up to $450 million. BID Invest approved the transaction on August 4, and the transaction documents were signed on August 6.

The funds will be used for the startup and gradual production ramp-up of two facilities at Sal de Oro: one plant with an expected maximum annual production capacity of 25,000 tons of lithium hydroxide, and another with an expected maximum annual production capacity of 23,000 tons of lithium carbonate. Once both plants are fully operational, the complex will be able to produce approximately 48,000 tons of lithium products per year. BID Invest estimates that the project will create approximately 620 long-term formal jobs.

Posco Holdings confirmed this Friday that it has secured the aforementioned credit line and stated that it will provide working capital for the two lithium extraction plants of its Argentine subsidiary. The company also revealed that the second facility is in the startup phase, with construction expected to be completed in the second half of 2026.

The transaction is part of the IDB LAC Minerals program, launched by the Inter-American Development Bank Group (IDB). The program aims to provide financing for the extraction, refining, and processing of critical minerals such as lithium, copper, nickel, and molybdenum, while promoting private capital investment in the related value chains in Latin America and the Caribbean.

Sal de Oro is Posco Argentina's integrated lithium project. In October 2024, the company commissioned a commercial plant with an annual production capacity of 25,000 tons of lithium hydroxide in General Güemes, Salta Province; Phase II added a plant with an annual production capacity of 23,000 tons of lithium carbonate at the Hombre Muerto salt flat.

The Phase II project, officially named Sal de Oro II, has been incorporated into the Large Investment Incentive Regime (RIGI). Under Resolution No. 1157/2026 of the Ministry of Economy, the project's total computable asset investment amounts to $207.94 million; the plant is planned to produce 23,000 tons of lithium carbonate annually, with all output destined for export.

BID Invest has classified this transaction as Category A for environmental and social risk, a category applicable to projects that may generate significant environmental or social impacts. The institution stated that it will carry out the corresponding environmental and social due diligence procedures for the project, as required by its Environmental and Social Sustainability Policy.