I haven't seen this posted here. I came across it reading through one of our competitors forums.
Source:
https://m.koreaherald.com/article/3391795CS pushes back ban on Chinese graphite for its EV tax credit until 2027
Researchers conduct a study at a lab of Posco Future M. (Posco Future M)
Korean battery makers are speeding up efforts to diversify their supply chains to source key materials, including graphite, as the US pushes back the deadline for the ban on the use of Chinese minerals by two years.
Earlier this month, the US Treasury Department announced an extension to its $7,500 tax credit scheme for electric vehicles containing components from Foreign Entities of Concern, which includes China, until the end of 2026.
"There have been concerns that if Korean batteries fail to receive the US tax benefit, the cheaper Chinese batteries would sweep the EV market," an industry official said.
"Three Korean battery makers logged a combined sales of 10 trillion won ($7.3 billion) in the US market last year. If the US restriction were to come into effect from this year, their sales would drop significantly." The three battery makers are Samsung SDI, LG Energy Solution and SK On.
Graphite is used to make electric battery anodes, which is the negatively charged portion of the battery. South Korea is heavily reliant on graphite imports from China, which currently accounts for 70 percent of the global output of graphite.
According to the Trade Ministry, Korea imported $241 million worth of synthetic and natural graphite for battery production in 2022, 93.7 percent of which were imported from China.
Against this backdrop, the US' plan to restrict China-sourced materials in batteries eligible for its EV tax credits starting this year, had raised concerns as Korean battery makers supply 30 of the 36 EV models receiving the US tax benefit.
"It is good that the restriction has been pushed back. If battery makers don't move quickly to find other sources for graphite, they will be in crisis again," said Park Jae-bum, a senior principal researcher at Posco Research Institute.
Posco Future M, which is Korea's only company producing cathode using natural graphite, forged a deal with Syrah Resources earlier this year to import a maximum of 60,000 metric tons of natural graphite products every year from Balama Graphite Operations in Mozambique, which is operated by the Australian company, for six years.
The company, which is also the sole producer of synthetic graphite in Korea, stood at No. 9 in the global cathode market in 2022, accounting for 2.3 percent of the market share.
Posco International is also in discussions with Madagascar and Tanzania to import about 90,000 tons of natural graphite annually.
LG Energy Solution also signed agreements with Syrah last June to jointly develop artificial graphite anode material for lithium-ion batteries, and issue an aggregate principal amount of $30 million in unsecured convertible notes. The battery maker is also expected to import natural graphite from Syrah Resources from 2025, under their agreement made in 2022.
Samsung SDI signed an agreement with Syrah last year for the supply of natural graphite cathodes. The company said it is testing Syrah's product in its batteries until July, and expects to source 10,000 tons of the natural graphite annually from 2026.
SK On inked a conditional offtake agreement with US graphite company Westwater Resources in February to secure battery-grade natural graphite in North America.
Under the agreement, SK On will be able to source a total of 34,000 tons of natural graphite anode products processed at Westwater’s Kellyton Graphite Plant located near Kellyton, Alabama from 2027 to 2031. SK On said it plans to use the product for its battery manufacturing facilities in the US.
The company also signed a joint development agreement with Urbix, an American graphite processor, last year to jointly develop high-performance anode materials customized for SK On batteries.
Following the US Treasury Department's decision, Korea's Trade Ministry announced a support program worth 9.7 trillion won ($7.07 billion) to help domestic battery makers to find new graphite suppliers outside of China in the next two years.
"Close cooperation between Korea's car and battery manufacturers and the government is crucial," Korea's Industry Minister Ahn Duk-geun said, underscoring the importance of diversifying and stable management of the supply chain of critical materials, in a meeting of the government and the private sector last week.
