June 25, 2024
Industry News

South Korea Considers Establishing Lithium Reserves to Support Battery Industry

Replace

South Korea has initiated the accumulation of its lithium stockpiles to ensure a stable supply of the vital mineral that is essential for its battery and automotive manufacturing sectors.

The country has recently procured some lithium carbonate, a processed variant of the battery material used in electric vehicles (EVs), from Chile through the state-run Korea Mine Rehabilitation and Mineral Resources Corp. (KOMIR), according to sources familiar with the matter.

To strengthen its position and counter potential shortages in the face of heightened global tensions, the South Korean government has allocated 233.1 billion won ($171 million) for securing critical minerals for the advancement of its cutting-edge technologies. A significant portion of this budget will be utilized for bolstering its lithium reserves for electric vehicle batteries.

With this marked increase in budget allocation compared to previous years, the government aims to utilize the funds during 2024 to enhance its strategic mineral reserves.

KOMIR declined to provide any comments when contacted.

South Korea’s strategic move to stockpile lithium comes at a time when prices of the mineral have struggled to recover from a steep decline last year. This initiative is also aimed at ensuring that domestic companies can meet the requirements set by the Inflation Reduction Act in the United States, thereby enhancing competitiveness.

Following the enactment of President Joe Biden’s landmark legislation in 2022, which seeks to reduce reliance on China for crucial battery materials, including lithium, prices of lithium surged to record levels due to increasing demand for electric vehicles worldwide. However, the subsequent oversupply and weaker-than-expected growth in EV demand led to a drastic drop in lithium prices by over 80% in 2023, with no substantial recovery seen so far this year.

In response to these market dynamics, South Korea’s trade ministry unveiled a plan in March to invest 241.7 billion won over the next three years for the construction of storage facilities for critical minerals, such as lithium, gallium, and rare earths.

FAQs

1. What is the purpose of South Korea’s lithium stockpiling initiative?

South Korea is building its lithium reserves to ensure a stable supply of the mineral for its battery and automotive industries.

Conclusion

South Korea’s strategic move to accumulate lithium reserves reflects its commitment to securing critical minerals for the development of advanced technologies. By investing in lithium stockpiles, the country aims to protect against potential supply shortages and strengthen its competitiveness in the global market.

Leave a Reply

Your email address will not be published. Required fields are marked *