As US Inflation Reduction Act Passes, North American Governors Rush to Korea: Reasons Explained

Domestic Battery Industry Receives Love Calls Ahead of Inflation Reduction Act Implementation

Chairman Choi Jung-woo of POSCO Group and the governors of Salta Province and Catamarca Province in Argentina are taking a commemorative photo after completing the groundbreaking ceremony for the first phase of brine lithium in Argentina this March.
[Image source=Yonhap News]

[Asia Economy Reporter Jeong Dong-hoon] Ahead of the implementation of the U.S. Inflation Reduction Act (IRA), local governments in North America are actively courting the domestic battery industry. As the IRA emphasizes the importance of local factories and mineral supply, local government officials are reaching out first to strengthen collaboration with Korean companies that hold significant positions in the North American mobility market.

According to the industry on the 3rd, three North American governors and economic ministers visited Korea this month alone, following the passage of the Inflation Reduction Act by the U.S. Congress, to conduct "battery sales." Doug Ducey, the current governor of Arizona, who is visiting Korea, is also expected to visit LG Energy Solution, which plans to build a cylindrical battery factory locally.

Choi Jung-woo, chairman of POSCO Group, met with Jason Kenney, governor of Alberta, Canada, and his delegation, who visited Korea on the 29th, to discuss resource development extensively. Although no concrete investment plans or cooperation agreements were finalized, Governor Kenney explained the value of lithium brine deposits (lakes with inorganic salt content of 500 mg per liter or more) in Alberta and discussed potential cooperation.

Alberta, Canada, is one of the major lithium production areas in North America. Due to the enactment of the IRA in the U.S., from next year, to qualify for electric vehicle subsidies in the U.S., vehicles must be assembled in North America and meet mineral and component ratio requirements for batteries. Accordingly, the value of minerals such as lithium, nickel, and cobalt that can be sourced locally in North America is expected to rise further. Alberta, in particular, has abundant lithium brine deposits where POSCO has developed eco-friendly extraction technology. According to the Korea Trade-Investment Promotion Agency, as of 2020, Canada's lithium reserves amounted to 15.16 million tons in lithium carbonate equivalent (LCE), with economically minable reserves estimated at 2.8 million tons. Of these, 44% of lithium is stored in brine deposits, most of which are concentrated in Alberta.

Choi Yoon-ho, CEO of Samsung SDI, is meeting and taking a commemorative photo with the delegation of the Governor of Indiana, USA, at the Cheonan plant on the 25th of this month. From the left, Bradley Chambers, Indiana Secretary of Commerce; Choi Yoon-ho, CEO; Eric Holcomb, Governor of Indiana; Park Jin, Head of Samsung SDI's Medium and Large Battery Division. Photo by Samsung SDI

Since starting lithium production technology development in 2010, POSCO has developed eco-friendly lithium extraction technologies from both brine and ore. POSCO's brine lithium production technology uses less brine and freshwater compared to other technologies, recycles most of the by-products during the process, and also boasts high productivity. Commercialization is now within sight. In March this year, construction began on a brine lithium plant based on the Hombre Muerto brine lake located in the highlands of Salta Province, Argentina, which is expected to produce 25,000 tons annually by 2024 (enough for about 600,000 electric vehicles).

Choi Yoon-ho, CEO of Samsung SDI, also met with Eric Holcomb, governor of Indiana, and Bradley Chambers, Indiana Secretary of Commerce, who visited Korea, on the 25th at the Cheonan plant in Chungnam. Samsung SDI announced in May this year that it would establish a joint venture with North American automaker Stellantis to produce electric vehicle batteries in Kokomo, Indiana.

Pat Wilson, Secretary of the Georgia Department of Economic Development, recently visited Korea and met with key executives including Chung Eui-sun, chairman of Hyundai Motor Group. Wilson toured Hyundai Motor’s headquarters located in Yangjae-dong, Seocho-gu, Seoul, and discussed specific matters with officials. Hyundai Motor previously decided to establish its first dedicated electric vehicle plant in Georgia, aiming for completion in 2025, with construction scheduled to begin in the first half of next year.

This content was produced with the assistance of AI translation services.