South Korea appears to be accelerating its efforts to reduce dependence on China for critical mineral imports. This comes as the Korean government has unveiled a strategy to secure supplies of key minerals, while major companies are actively pursuing diversification of import channels for mineral resources.
In 2023, 79.6% of South Korea’s lithium hydroxide imports, a key material for EV batteries, came from China – down 8.3 percentage points from 87.9% in 2022. Imports from Chile rose to 17.5%. For neodymium iron boron, used in EV permanent magnet motors, 84.7% came from China in 2023, a slight dip from 87.5% in 2022, while imports from the Philippines increased to 14.3%.
Analysts attribute the trend of reduced dependence on China for lithium and rare earth minerals to the South Korean government’s policies supporting supply chain diversification, as well as to intense “de-Chinaization” efforts by companies adapting to factors affecting the trade environment (e.g. the U.S. Inflation Reduction Act).
Major moves in the sector include the completion by Korean steel giant POSCO of a new lithium hydroxide plant, the first of its kind in South Korea. The plant will use Australian lithium. POSCO is also planning a lithium carbonate plant in Argentina. Other moves include a deal signed by LG Energy Solution with an Australian firm for 85,000 tons of lithium concentrate.
Source: Yonhap News Agency, March 13, 2024
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