Korea looks to Australia for reliable battery materials

Korea’s three largest battery manufacturers – LG Energy Solution, Samsung SDI and SK Innovation – increased their combined global market share to 34.7 per cent in 2020, according to the Australian Trade and Investment Commission.

Meanwhile, usual hubs of critical minerals production – such as the Democratic Republic of Congo (DRC) which mined 70 per cent of the world’s cobalt in 2019 – have been disrupted by environmental, social and governance (ESG) risks and COVID-19 disruptions.

Concurrently, China refined 80 per cent of mined cobalt in 2019, leaving Korea to shop around for more stable and reliable relationships in cobalt mining and refinery.

LG Energy Solution president and chief procurement officer Kim Myung-hwan said the demand for electric vehicles (EV) had sparked a need for Korea to become more proactive in their production.

“With the rapid growth of the EV battery market, securing key raw materials is also becoming one of the most important sources of competitiveness,” Myung-hwan said.

While Australia only mined 4 per cent of the world’s cobalt in 2019, it also mined 47 per cent of the world’s lithium resource in 2017 and holds the world’s largest nickel resource (24 per cent).

Some Korean developments have indicated these Australian production numbers will only rise towards 2030.

South Korea’s largest steelmaker POSCO strengthened its battery supply chain in 2021 with investments in Australian mining projects.

One came in April when POSCO established a joint venture with Pilbara Minerals called POSCO Lithium Solutions, in which the company will invest $1 billion for a lithium hydroxide plant.

Another in May saw POSCO invest $320 million in the Ravensthorpe nickel operation to offtake 7500 tonnes of nickel.

In June, the company paid $4.5 million to Queensland Pacific Metals (QPM) giving it access to 3000 tonnes of nickel and 300 tonnes of cobalt per year from the Townsville Energy Chemicals Hub (TECH) project.

The same deal saw LG Energy Solution pay $14.2 million to QPM for 7000 tonnes of nickel and 700 tonnes of cobalt per year.

LGES global supply chain management leader Dongsoo Kim said these kinds of deals were integral to future development.

“This is the most meaningful investment in our supply chain for LG Energy Solutions since the company spun out from LG Chem. We believe the TECH project will deliver sustainable nickel and cobalt production that is in line with LGES’ operating philosophy,” Kim said.