The Inter-American Development Bank (IDB) has extended a loan of approximately 700 million dollars to POSCO Holdings for its lithium mining and production operations in Argentina. This funding will enable POSCO to secure substantial working capital, expand its lithium production capabilities, and strengthen its supply chain for critical minerals.
On August 28, the Ministry of Economy announced that IDB Invest, the private sector investment arm of the IDB Group, is providing the financial support for POSCO's lithium project in Argentina.
IDB Invest is an international financial institution that offers loans, guarantees, and equity investments for private sector development projects in Latin America.
With this funding, POSCO can stabilize its working capital and reduce financial costs through low-interest loans and tax benefits.
The government views this financial support as a tangible outcome of the economic development agenda discussed during the President's recent visit to South America. It highlights the collaboration between Latin America's critical mineral resources and South Korea's technological and financial capabilities to diversify the lithium supply chain.
The Korean Trust Fund also supported the feasibility review process for POSCO's project. This collaboration links multilateral development bank loans with the Korean Trust Fund to bolster domestic companies' initiatives in Latin America.
On August 27, Moon Ji-sung, the Director-General for International Economic Affairs at the Ministry of Economy, met with James Scriven, President of IDB Invest, and other IDB Group executives to discuss expanding domestic companies' market presence in Latin America and potential follow-up cooperation.
The Ministry emphasized the need to enhance cooperation that connects critical mineral resources in Latin America, such as lithium, with the technological expertise of domestic companies amid growing uncertainties in the global supply chain. IDB Invest also expressed its commitment to continue collaborating with Korean companies.
The government plans to invest 150 million dollars in IDB Invest's third general capital increase. This plan was announced during the IDB annual meeting in March 2024, following a letter of intent submitted by the Deputy Prime Minister in December of last year.
The government aims to leverage the Korean Trust Fund and the Korea-Latin America Business Forum to strengthen financial support and discover new business opportunities for domestic companies in Latin America.
* This article has been translated by AI.
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