China Graphite Export Curbs Prompt South Korea Search for Alternatives

Summary:

• South Korea faces a challenge in securing new graphite sources due to China's stricter export controls on this vital mineral used in EV batteries.
• The South Korean trade ministry held emergency talks with major battery manufacturers and materials firms to minimize the impact.
• China dominates global graphite production, with 820,000 metric tons in 2021, raising concerns about dependence.
• The new export permit requirements, beginning on December 1, are linked to U.S.-China trade tensions.
• South Korea is urgently seeking alternative graphite sources in countries like Tanzania and Mozambique while considering boosting domestic production.
• Critics accuse China of using resource control for geopolitical purposes, and export restrictions on other essential minerals may disrupt South Korea's industry.
• Experts see China's actions as economic coercion, but a global coalition could deter further moves.
• South Korea needs to reduce its reliance on China for strategic minerals to ensure a stable supply.

South Korea is facing a pressing challenge as it seeks new sources of graphite following China's tightening of export controls on this critical mineral, essential for electric vehicle (EV) batteries. 

In response, the country's trade ministry conducted emergency discussions on Monday with leading battery manufacturers like LG, Samsung, and SK Innovation, along with materials firm POSCO, with the aim of mitigating the potential impact. China's dominant role in global graphite production, 

providing 820,000 metric tons in 2021 compared to Brazil's 68,000 metric tons, has raised concerns, and the new export permit requirements, set to take effect on December 1, are linked to escalating trade tensions between the United States and China. South Korea, which has prioritized EVs and batteries for economic growth, is now urgently seeking alternatives in graphite-rich nations such as Tanzania and Mozambique, and considering boosting domestic graphite production while engaging with Chinese trade authorities. 

However, critics have accused China of "weaponizing" resources for geopolitical purposes, and recent export curbs on other crucial minerals like lithium, nickel, cobalt, and manganese could seriously disrupt South Korea's industrial ecosystem, leading experts to label the graphite squeeze as "economic coercion." To safeguard against future supply shocks, South Korea must rapidly reduce its reliance on China for strategic minerals.