South Korea has announced plans to raise its stockpiles of critical metals such as cobalt, nickel and rare earths that are used in key emerging industries including electric vehicle (EV) batteries and renewable energy.
The government has set a target to increase its stockpiles to cover 100 days of consumption, up from 56.8 days currently, the country's ministry of trade, industry and energy (Motie) said today. It did not give a target date.
South Korea will build new facilities and expand existing ones to achieve this goal. State-run firm Korea Resources (Kores) will manage the stockpiles, Motie said.
The definition of "critical metals" applies to 35 groups of products, mainly covering nickel, cobalt, lithium, manganese, magnesium, titanium, bismuth, selenium, silicon, tin, arsenic, boron, cadmium, rare earth metals and platinum group metals. These are different from common metals such as copper and steel, Motie said.
The stockpiling plan is designed to establish a secure supply chain to cope with potential supply uncertainties. Global demand for these critical metals is expected to grow fourfold by 2040 compared with last year, the ministry said.
South Korea will also promote recycling of rare metals as a way to expand its self-sufficiency, as the majority of the country's consumption of these metals depends on imports. It is planning to establish a system to collect discarded solar panels and rechargeable batteries in an organised manner.
The government also aims to support research projects and offer tax incentives for businesses that are engaged in the rare metal industry, with a target of involving 100 firms by 2025.
Major South Korean companies have been investing in the EV and renewable energy industry in recent years. Hyundai Motor and battery manufacturer LG Energy Solution on 29 July unveiled a plan to establish a $1.1bn joint venture to produce EV batteries in Indonesia.
South Korean battery cathode material manufacturers including LG Chem, Samsung SDI, L&F and Cosmo AM&T have raised their demand for lithium-ion nickel-cobalt-manganese (NCM) precursors since the start of this year, given the rapid development of the EV industry because of global carbon reduction targets. NCM precursors use some of the critical metals covered in the stockpiling plans, such as lithium, cobalt and nickel, as feedstock.
South Korea, a major global supplier of battery and semiconductor technologies, is home to companies including LG Chem and SK Innovation in the battery sector and Samsung and SK Hynix in chip manufacturing.
The government is introducing tax breaks and incentives for battery and semiconductor investment in a move that is expected to encourage manufacturing and demand for minor metals. Seoul has identified these two areas as key strategic industries and changed the tax code to incentivise research and development in the technologies, which use a range of metals such as cobalt, lithium, nickel and manganese in batteries, as well as silicon, gallium and germanium in semiconductor chips.
South Korea's eco-friendly vehicle sales rose to 30,316 units in March, up by 59pc on the year and by 65pc from February, according to Motie data. Exports of eco-friendly vehicles reached 33,164 units in March, up by 29.3pc from a year earlier and accounting for 16pc of the country's total automotive exports of 203,837 units in the month.
