As global economies transition toward renewable energy and technological advancements, the spotlight increasingly focuses on critical minerals essential for high-performance batteries, electric vehicles (EVs), and other advanced technologies. South Korea, a global leader in the battery and electronics sector, is poised to play a pivotal role in this transformation, providing Australia with significant opportunities to fortify its economic and industrial collaborations with the Asian powerhouse.
Korean battery industry: a growing market
South Korea’s battery market has evolved into a cornerstone of the global electric vehicle (EV) industry. The country’s three major makers, LG Energy Solution, Samsung SDI, and SK, had a combined 23.1% share of the global battery market as of November 2022. These companies are central to South Korea’s ambitious plans for green technology and EVs, working closely with automotive giants such as BMW, Volkswagen, Audi, and Hyundai, among others.
The country’s conglomerates like POSCO Holdings, L&F Co, and Korea Zinc also support these battery makers, particularly in providing cathode and anode active materials, electrolytes, separators, and recycling services. In this booming landscape, the role of critical minerals like lithium, cobalt, manganese, nickel and rare earth elements (REEs) cannot be overstated.
An untapped reservoir: Australian critical minerals
Australia is rich in several critical minerals such as lithium, cobalt, and nickel that are fundamental to the manufacturing of batteries. The Australian mining industry has been actively exploring and extracting these minerals, which could become a vital part of South Korea’s supply chain.
The Australia-Korea Partnership in the REE supply chain represents not just bilateral collaboration but has global ramifications. Companies from sectors such as advanced consumer electronics and defense in Korea, which often have overseas manufacturing bases, stand to benefit, naturally extending the partnership’s impact to the international stage.
Policy framework: setting the stage for collaboration
In February 2023, the Korean Ministry of Trade, Industry and Energy (MOTIE) outlined strategies to safeguard their supply chains for 33 defined critical minerals. These include plans to:
- extend stockpiling from 54 days to 100 days by 2031
- develop systems to detect supply chain risks
- enhance bilateral and multilateral cooperations
- fund higher-risk exploration projects
Moreover, the Memorandum of Understanding signed between Australia and Korea in December 2020 aims to foster joint ventures in the critical minerals sector. These collaborations can facilitate trade, promote research and development, and stimulate investment in mineral development and production.
Potential collaborations
- Joint research & development: Australian and Korean research institutes could collaborate on improving extraction processes and recycling technologies.
- Supply chain security: both countries could develop an early warning system for disruption in the supply chain.
- Market expansion: South Korean companies can benefit from Australia’s burgeoning market for EVs and renewable energy storage solutions, while Australian companies could make inroads into South Korea’s consumer electronics and automotive sectors.
- Sustainability & recycling: South Korea’s plans to develop a battery recycling ecosystem offer Australian companies a chance to invest in sustainable technologies.
- Public-private partnerships: government financing could help foster riskier projects that can result in breakthrough innovations
The convergence of interests and complementary strengths of Australia and South Korea in the critical minerals sector represents a golden opportunity for strategic, long-term cooperation. With both countries backing initiatives through public and private investment, the partnership promises to be a win-win situation, driving economic benefits while also laying the foundation for a sustainable future.
By forging these links now, Australia can not only expand its influence in the global critical minerals market, but also play a crucial role in accelerating the world’s transition to renewable energy.
