[Energy-topia] Will We Keep Repeating That "The Impact on Korea Is Limited"?

China Expands Export Controls from Gallium to Graphite
The Real Issue: A Bigger Blow May Be Hidden
Thorough Preparation Needed Amid Escalating US-China Trade Tensions

Graphite, which China announced it will control exports of starting this December, is one of the key minerals for batteries (secondary batteries). Lithium-ion batteries are mainly composed of cathode materials, anode materials, electrolytes, and separators. Graphite is used as the anode material among these.

The role of graphite in secondary batteries is as important as lithium ions. When charging the battery, lithium ions released from the cathode move to the anode and settle properly. Graphite has a structure where six carbon atoms are stacked in a lattice pattern layer by layer. During battery charging, lithium ions are inserted into this interlayer structure. During discharge, the reverse reaction (deintercalation) occurs. This repeated insertion and deintercalation is the basic principle of lithium-ion batteries.

The current lithium-ion battery could be developed by using graphite as the anode material. There is no suitable alternative material to replace graphite. Silicon is being researched as a substitute, but due to the swelling phenomenon, pure silicon cannot be used alone and is used together with graphite.

Despite the importance of graphite, it has not received much attention because it is common. Its price is also low. Environmental pollutants are generated during refining and smelting processes. As profitability declined and environmental issues overlapped, advanced countries including South Korea gradually reduced graphite production. South Korea was the world's top graphite producer in 1930 but now produces almost none. Currently, South Korea imports 93.7% of its graphite from China.

China, which took on the graphite refining business abandoned by advanced countries, has dominated the global graphite supply chain. China recognized the importance of minerals early on and enacted the National Mineral Resources Law in 1991, designating key minerals as protected mineral types. Graphite was already included in the 24 strategic mineral resources announced in November 2016.

When China announced export controls on graphite, a core battery mineral, the battery industry was hit hard. Related authorities such as the Ministry of Trade, Industry and Energy hurriedly held countermeasure meetings.

It was somewhat expected that China would impose export regulations on key battery minerals. In July, China announced export controls on gallium and germanium used in semiconductors. At that time, the government showed a complacent attitude, saying "the short-term impact is limited." However, the reporter warned in a column titled ‘Gallium is just a counterattack’ that the next target could be key battery minerals, especially graphite, a core anode material.

China’s choice of gallium and germanium as the first export control items among many minerals was just a ‘taste test.’ If the opponent throws a ‘jab’ and the response is "it doesn’t hurt at all," then a bigger blow will come next. The concerning point is that graphite may not be the last. Graphite can be replaced by finding alternative production sites over time. China is likely hiding its real weapon elsewhere.

China’s export controls stem from trade conflicts with the United States. Recently, the U.S. announced additional semiconductor export restrictions on China. It is predicted that President Joe Biden and Chinese President Xi Jinping will meet at the Asia-Pacific Economic Cooperation (APEC) summit in November. The U.S. and China showed off their strength to each other before the summit. South Korea was caught in the crossfire. It would be fortunate if the U.S. and China return to a reconciliation mode, but if the conflict deepens, the real problem will follow. It is time to prepare for the real fight instead of repeating that "the impact on South Korea is limited."

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