Australia-Korea critical minerals partnership to grow

Published date: 08 September 2021

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The Australia-Korea Business Council has recommended stronger collaboration between Korean manufacturers and Australian mining companies, for more downstream processing and value-adding in the critical minerals supply chain.

"Given the natural synergies between Australia and Korea in this sector, cooperation in the critical minerals sector represents a significant opportunity to boost the profile of the bilateral relationship and help move our relationship from one that is largely based on trade to one that is largely based on investment," the council said in a critical minerals discussion paper.

Korea is Australia's fourth largest trading partner and Australia supplies around 40pc of Korea's critical mineral imports. Korea is the 17th largest foreign investor in Australia.

"The mutual benefits of cooperation and collaboration between Australia and Korea are clear. Australia can be a reliable supplier of critical materials to allow Korea to move towards a lower carbon future, and Korea can help Australia unlock an additional A$7.4 bn/yr ($5.5bn) and 34,700 jobs to Australia's economy," the council said.

Australia is a leading producer of several of the metals considered critical by Korea including lithium, manganese, nickel, titanium, zirconium and rare earths. It also has potential to increase its production of other critical metals such as cobalt, gallium, chromium, germanium, molybdenum and niobium.

The Korean Ministry of Trade, Industry and Energy said in August that it would increase its stockpile of 35 rare metals to cover 100 days, up from 57 days. This is overseen by the Korea Resources Corporation. Coupled with this is the government's plan to provide benefits to 100 local companies to support private-sector projects to explore mineral deposits overseas and related investment.

Australia's critical minerals strategy, announced in 2019, targets investment in upstream and downstream supply chains providing incentives for innovation that lowers costs and increases competitiveness. Investment in processing, separating, refining and manufacturing is a core part of Australia's broader goals for critical minerals.

Major Korean companies that are already involved in investments, partnerships or offtake agreements with Australian mining firms include LG Chem, LG Energy Solution, SK Innovation, Posco, EcoPro and Samsung SDI