Citibank Korea announced Friday that it signed a syndicated loan agreement with Posco Argentina to support the development of a salt lake with lithium reserves for Posco Holdings.

As a joint mandated lead arranger, Citibank arranged a $412 million (505.4 billion won) syndicated loan for Posco Argentina with support from Korea Trade Insurance Corp. The agreement was reached on Jan. 25.

“This deal is meaningful as it provides financing support for enhancing Korean companies’ competitiveness in the eco-friendly materials industry by providing a stable supply of key raw materials and creating a value chain for EV batteries through partnership with K-SURE," said KyoungHo Kim, Citibank Korea's head of corporate banking.

A syndicated loan refers to a joint loan in which a group of lending institutions work together to provide a large amount of mid or long-term funds for a corporation under common documentation.

Through this project, Posco Holdings plans to build a lithium extraction facility from a salt lake containing lithium reserves located in Salta Province, Argentina. From the lake, the company will produce 25,000 metric tons of lithium hydroxide per year -- enough to power about 600,000 EVs -- by 2024.

Highly rich in natural resources, Argentina boasts the world’s third-largest lithium reserves and is the world’s fourth-largest producer of lithium, a strategic mineral.

The project will benefit Korean companies by providing them with a stable supply of lithium, a critical raw material for EV batteries, amid global supply chain issues which are putting companies in increasingly fierce competition for key minerals.

“Citibank will redouble its efforts to help Korean companies increase their global competitiveness in emerging industries facing stiff competition around the globe," Kim said.