After market close on Monday, Lithium Americas (TSX:LAC) announced that it is now in talks to to develop its Cauchari-Olaroz project with Korean Steelmaker POSCO - likely with the help of the latter's proprietary lithium extraction process. The companies expect to complete a heads of agreement (HOA) soon that will outline conditions for a new joint venture company. Full terms of the agreement have not been yet negotiated, but Lithium Americas' release states that it expects the new company to use POSCO's proprietary process with brine from its Cauchari-Olaroz salar properties. "Over the past year working closely with the POSCO team, we have witnessed first-hand the commitment and creativity of the POSCO scientists, engineers and technicians to perfect this industry transformative processing technology," said Lithium Americas CEO, John Kanellitsas. "We are very pleased and honoured to continue to collaborate with Dr. Chon and his team to commercialize the innovative POSCO process into a profitable business." POSCO has been working with Lithium Americas to test its process by way of a demonstration plant at the company's Cauchari-Olaroz lithium project in Argentina. Testing on lithium phosphate produced at the demonstration plant has yielded positive results, and was successfully processed into battery grade lithium hydroxide and lithium carbonate in Pohang, Korea. According to Kanellitsas, both companies now believe the process to be commercially viable based on those results. He noted that at 200 tonnes of capacity, the demonstration plant in Argentina is quite large, and it was unusual for a plant to be cycling smoothly and on a 24 hour continuous basis at that scale. "Keep in mind that this is the third POSCO plant, with a smaller pilot plants showing earlier success in Chile and Pohang, Korea," he added. "We are now confident that the process will work on a commercial scale, and more importantly, so is POSCO."