South Korea has begun building lithium reserves to ensure supplies of vital minerals for the country’s economy. battery and automobile manufacturing industries.
This year, the country bought some lithium carbonate, a refined form of battery material used in electric vehicles, from Chile through the state-controlled Korea Mineral Resources and Mine Recovery Corporation (KOMIR). , said two people familiar with the matter. Not allowed to speak publicly
According to another person with knowledge of the matter, the government has now allocated 233.1 billion won ($171 million) to secure key minerals for the development of the nation’s advanced technologies. family. It plans to spend most of that money building up lithium reserves for electric car batteries in an effort to address potential shortages amid rising geopolitical tensions, the person said.
The budget, which marks a 526% increase over last year, is expected to be implemented in 2024, according to the person.
KOMIR declined to comment when reached by phone.
South Korea’s stockpiling strategy comes at a time when lithium prices are struggling to recover from a sharp plunge last year. Authorities are also working to ensure domestic companies can remain competitive in the US by meeting the requirements of the Disinflation Reduction Act.
President Joe Biden‘s signature law, enacted in 2022, aims to reduce reliance China – remains dominant in the processing of critical battery materials including lithium.
Lithium prices surged to record highs in late 2022 as the global push toward electrified transportation boosted consumption, while supply struggled to keep up. Automobile and battery manufacturers are trying to secure offtake or expansion agreements to lock in lithium sources.
Since then, electric vehicle demand growth has been weaker than expected, causing battery makers including LG Energy Solution Ltd. and Samsung SDI Co. reported a smaller profit last year. Meanwhile, a large wave of new lithium supply is also putting pressure on prices – which have fallen more than 80% in 2023 and are yet to see any significant recovery this year.
South Korea’s trade ministry in March announced a plan to invest 241.7 billion won over the next three years to build a repository of important minerals, including lithium, gallium and rare earths.
