(Adds interview with Pilbara CEO)
SEOUL/HOLLYWOOD, Fla., Feb 27 (Reuters) - South Korean steelmaker POSCO said on Tuesday it had agreed to buy up to 240,000 tonnes of lithium concentrate a year from Australian miner Pilbara Minerals, the latest Asian company to secure supply of this critical ingredient for electric vehicle batteries.
As part of the deal, the Australian unit of POSCO will also acquire a 4.75 percent stake in Pilbara for A$79.6 million ($62.49 million).
POSCO planned to make about 30,000 tonnes of lithium products per year starting from 2020, it said in a statement. It plans to supply these to firms including battery material manufacturing affiliate POSCO ES Materials and its joint venture with China's Huayou Cobalt Co Ltd, as well as South Korean battery makers.
Key South Korean battery makers include LG Chem, Samsung SDI and SK Innovation.
Australian lithium miners have signed a string of so-called off-take agreements over the past year to sell output to especially Chinese auto and battery makers as China builds out its electric vehicle capacity faster than anywhere else in the world.
"The Koreans ... have looked at how quickly China is moving and thought that they really need to be a part of that. That is how our engagement with the likes of POSCO came about," Pilbara Minerals Chief Executive Ken Brinsden said on the sidelines of a mining conference in Florida.
Lithium prices have more than doubled in the past two years on expectations of strong demand from the battery sector.
Pilbara Minerals, which owns the Pilgangoora lithium mine in western Australia, plans to begin production of about 300,000 tonnes of lithium concentrate in the second half of this year, eventually reaching as much as 800,000 tonnes annually.
Pilbara already has off-take agreements for the rest of its planned output with Chinese automaker Great Wall Motor Co Ltd and others. "We are completely sold out," Brinsden said.
POSCO said the deal meant it had secured a stable source of raw materials for manufacturing batteries, adding that it would be able to choose between different sources of lithium depending on prices. It said other sources of the material included recycling.
POSCO also agreed to acquire convertible bonds worth about A$79.6 million that can be turned into another stake in Pilbara.
Pilbara also planned to take a 30 percent stake in POSCO's planned future lithium factory. POSCO has yet to disclose a timetable or location for that facility. ($1 = 1.2809 Australian dollars)
(Reporting by Joyce Lee in Seoul and Nicole Mordant in Hollywood, Florida; Editing by Joseph Radford and Susan Thomas)