Korea-Australia Join Hands on Critical Minerals Supply Chain... Strengthening Response to US IRA

'Core Minerals Business Roundtable'

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] Ministers and related companies from Korea and Australia gathered in one place to strengthen cooperation in the critical minerals supply chain between the two countries.

The Ministry of Trade, Industry and Energy announced on the 12th that it held the "Korea-Australia Critical Minerals Business Roundtable" with Australia, a resource-rich country and a U.S. Free Trade Agreement (FTA) partner, to secure a stable supply chain of critical minerals for Korean companies.

At the event, Lee Chang-yang, Minister of Trade, Industry and Energy, and Don Farrell, Australian Minister for Trade and Tourism, along with more than 20 companies from both countries participated. The companies discussed concrete measures for cooperation in the critical minerals supply chain, such as long-term supply contracts and mutual investments. Korean companies in attendance included Hyundai Motor Company, SK On, Samsung SDI, POSCO International, and Korea Zinc.

The background of this bilateral cooperation is to secure key minerals such as lithium and nickel, essential raw materials for manufacturing electric vehicle batteries, in response to the U.S. Inflation Reduction Act (IRA) tax credit issue. The U.S. requires that a certain percentage (40% in 2023 → 80% in 2027) of critical minerals used in electric vehicle batteries be sourced from the U.S. or countries with which the U.S. has an FTA, mined and processed accordingly.

Australia is known as a resource-rich country ranking 1st in lithium (49%), 3rd in cobalt (4%) and manganese (12%), 4th in rare earth elements (8%), and 5th in nickel (7%) in global production. The government expects that this cooperation will help manage the external trade environment stably while contributing to the expansion of Korean companies' global battery market share.

Minister Lee emphasized, "Critical minerals are like essential vitamins in carbon emission reduction and energy transition fields such as electric vehicles, secondary batteries, wind, and solar power," adding, "Korea, which has global competitiveness in electric vehicles and secondary batteries, and Australia, which possesses abundant critical minerals, can promote investment and trade cooperation in the critical minerals sector to contribute to the economic development of both countries."

The government plans to continuously explore various cooperation models such as expanding bilateral investments, discovering joint research and development (R&D) projects, and establishing global ESG standards through the Korea-Australia Critical Minerals Working Group, which has been operating since February.

Meanwhile, at the event, to explore cooperation methods and promote mutual investments between companies from both countries, Korea's KOTRA and Export Insurance Corporation, along with Australia's Austrade and Export Finance Australia (EFA), introduced their respective investment and financial support systems and actual cooperation cases.

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