Australia Emerging as a Key Partner in Energy Security

Companies, Smooth Raw Material Procurement is Key
Full Efforts to Establish Close Cooperation with Australia
Government Supports Joint R&D and More

Overview of the nickel mine of Ravensthorpe Company in Australia

The government’s initiative to facilitate meetings between Korean and Australian mining companies stems from the fact that securing critical minerals has become a top priority amid the intensifying global resource hegemony competition. With mounting pressure from the U.S. to ‘decouple from China,’ Australia is being positioned as a new alternative for energy security.

According to the report titled “Trends in Australia’s Critical Mineral Supply Chain and Directions for Cooperation with Korea,” published by KOTRA on the 19th, Australia is Korea’s top supplier of mineral resources, accounting for 42% of Korea’s general mineral imports last year. The import value of minerals reached approximately $18.77577 billion. Among the six critical minerals designated by Korea for carbon neutrality (lithium, nickel, cobalt, graphite, rare earth elements, and platinum group metals), Australia ranks second globally in reserves of lithium, nickel, and cobalt, which are essential for battery production.

Following the recent implementation of the U.S. Inflation Reduction Act (IRA), Australia’s importance as a stable supplier of critical minerals is increasing. As a country with a Free Trade Agreement (FTA) with the U.S., Australia plans to expand support not only for mineral mining but also for refining technologies, thereby promoting domestic and foreign investment in related industries.

Australia is particularly investing government subsidies in modernizing lithium manufacturing by developing chemical facilities that process spodumene (high-purity lithium ore) using renewable energy for low-carbon production. This is expected to account for about 20% of the world’s lithium hydroxide refining capacity by 2027. Australia is also strengthening its nickel production capacity, a key raw material for battery manufacturing. BHP, Australia’s top mining company and the world’s largest, signed a memorandum of understanding with automaker Ford Motor Company in July this year to supply nickel. The critical issue lies in how much greenhouse gas emissions generated during nickel production, transportation, and refining can be reduced. This is why Australia requires technological cooperation with our major companies in mineral refining.

Our companies plan to make every effort to establish close cooperative relationships with Australia through this roundtable to ensure smooth procurement of raw materials and minimize supply chain risks. Earlier, Hyundai Motor Company signed a memorandum of understanding with Australian rare earth company Arapura Resources. Hyundai plans to purchase 1,000 to 1,500 tons annually of rare earth oxides produced from Arapura’s Nolans rare earth mine by 2025.

POSCO Group also signed a memorandum of understanding (MOU) last year with Australian resource development company Hancock Prospecting for the development of mines involving important metals such as lithium, nickel, copper, and iron ore. The two sides intend to expand cooperation in iron ore mine development and the production of HBI (Hot Briquetted Iron, a processed product shaped like a briquette by removing oxygen from iron ore) as steel raw material to jointly explore future industrial sectors.

The Korean government also plans to actively support these efforts. Since February this year, the government has been operating the Korea-Australia Critical Minerals Working Group to jointly conduct research and development (R&D) on critical minerals and co-develop Australian mines. A government official emphasized, “Korea has maintained long-standing cooperation with resource-rich Australia in the field of mineral resources,” adding, “We will discover new models of mineral raw material cooperation between governments and companies.”

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