South Korea’s trade minister Ahn Duk-geun has revealed in an interview with Bloomberg that the country is facing growing graphite shortages and may have to seek out alternative sources outside of China.
Graphite is commonly used in battery anodes of electric vehicles (EVs).
The shortages coincide with updated Chinese import controls that will require graphite producers to apply for import licences. The country has credited this move as an effort to protect national security.
China has already tightened its imports of other critical materials, such as gallium, in an effort to fight off US semiconductor controls.
Duk-geun stated that South Korea would try to find “an alternative source” of graphite.
“At the same time, [China’s] measures were mainly targeted against the United States,” he stated.
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“So we need to see how much our industry might be impacted, and then we will see what we can do.”
Research analyst GlobalData explained the relationship between the EV industry and graphite.
“An accelerating EV industry will be at the front and centre of the battery industry’s evolution and growth over the next decade,” it stated.
“[EVs] will account for over 80% of its revenues by 2030.”
GlobalData forecasts that by 2025 around 15.5 million EVs will have been manufactured.
Many countries, including the UK, either have passed or are considering legislation to ban or limit the sale of petrol and diesel vehicles over environmental concerns. To achieve this, creating an eco-friendly battery supply chain for EVs will be essential globally.
In the rush to electric, GlobalData notes that China has secured a “monopoly” over graphite and other critical minerals such as lithium. Whilst these minerals can be found in many reserves outside of China, the country has either purchased these mines or mining contracts to control the access of these resources. This allows the crude minerals to be transported directly to China for refining.
This monopolisation has created global concern as it leaves the market value and availability of these minerals hinging entirely on Chinese import policies.