Seoul battery ambitions rely heavily on Beijing

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Hello from the beautiful Jeju Island in South Korea. Celebrities flock to sample crustaceans from the depths of the ocean. Ama..

Back on the mainland, President Moon Jae-in returned after a summit meeting with President Joe Biden at the White House. North Korea was mostly high on the agenda, but China Pretend not to seeSouth Korea is one of the countries encouraging Biden to join in efforts to respond to Beijing’s growing influence. But, as we are discussing today, South Korea, like many countries, is not in a good position to catch Beijing’s attention. Especially when it comes to manufacturing batteries, the most important component of electric vehicles, Seoul wants to dominate.

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Impact of the Chinese fortress on electric vehicle materials

A mixed precipitate of nickel and cobalt hydroxide. Lithium iron phosphate. Cathode. anode. Don’t worry if you are new to this lingo. You will get used to it soon.

The world is competing for ambition Climate change goalsThe rapid shift from gas-intensive vehicles to electric vehicles and from coal-fired power plants to renewables is important for many government programs to reduce carbon emissions.

South Korea, home to some of the world’s largest countries Manufacturer of batteries for electric vehicles, Located at the heart of the global transition.

Special forces from LG, SK, Samsung, etc. Quick partnership We are affiliated with major automotive groups such as Ford, General Motors and Volkswagen. New South Korean owned battery factories are established one after another from Ivansa, Hungary, Commerce, Georgia, USA.

But when it comes to raw materials South Korea, and indeed the entire electric vehicle supply chain, relies heavily on China to make these batteries.

A simple look at where the minerals mentioned above were mined reveals an impractical truth.

Indonesia is the largest nickel producing country in the world. The Democratic Republic of the Congo is responsible for more than two-thirds of the total. cobaltMore than half of the world lithium Made in Australia, almost a third of the copper comes from Chile.

However, China is the biggest processor of each of these minerals. And when it comes to rare earth metals (inputs used in some electric vehicle engines and the myriad of electronics essential to modern technology), the country’s dominance is even more serious.

The International Energy Agency (IEA) has achieved an astonishing 90% share of China in rare earth element processing (conversion of rare earth elements from mined materials into oxides, metals and magnets used in batteries ). Highlighted.

Ross Gregory and James Kluger, advisers to the key materials division, said last month Australian person ($, Subscription required), it is a mistake to attribute China’s hegemony to a “scandalous plot”. .. Hold the world’s ransom. “

“On the contrary, the West was ready to throw the ore and focus on China, leaving China to implement ugly carbon emissions processing technology,” they said. “Of course, China Looking to the future, we have helped the industry with cheap access to land and reagents and recognized the long-term strategic advantages. “

It is the outlook for demand for these important minerals that is making matters worse. OUCH Objectives of the Paris Agreement The world must quadruple the production of minerals used in clean technologies over the next 20 years.

Businesses and governments are slowly tackling this challenge.

POSCO, Korea’s national iron and steel champion is the symbol of those who try to take advantage of it. The Seoul-listed group recently began construction at a site near the Guangyang steel plant west of the port city of Busan, extracting spojumen lithium hydroxide shipped from Pilbara Minerals, Australia. I go.

However, it will take years for such a consortium to materialize. Huge growth in demand – The domination of China in the processing of minerals is certainly visible. This will have a huge impact on wider trade policies in Asia.

The exposure to China is serious for South Korea, which is trying to monopolize the electric vehicle market with cars, batteries and new technological parts.

The soul is also wary of another provocation Beijing repulsion back Boycott of China Four years ago, South Korea deployed an American missile defense system.

Combined with the fact that South Korea’s electric vehicle ambitions depend on China for about a quarter of its exports, it’s no wonder the statement resisted pressure from Biden to join the criticism. American from Beijing. That is to say.

Seoul’s reaction will irritate parts of Washington. But vigilance may point to the limits Biden can push even the closest United States ally.

More generally Detailed report The IEA found that the investment plans “are not ready to support the accelerated energy transition”.

This means that bottlenecks are looming, just as the world is seriously trying to switch to clean fuels.

“The current production and processing of many minerals converted to energy is highly concentrated in a small number of countries, making the system vulnerable to political instability, geopolitical risks and possible export restrictions. “The IEA said, highlighting China’s ban on some mineral exports, and Indonesia as a short-term example of a lingering problem.

Commercial link

Yuqing Xing, professor of economics at the National Graduate Institute of Political Studies, wrote: Attractive work about Manufacturer without factory Explain how the commercial value of their production is undervalued. He points out that the added value of intangible assets embodied in tangible goods is not recorded in any country’s trade statistics. ..

How new research The world is divided into three models for Personal data regulationFormed by Chinese, European and American approaches, it influences trade in digital services.

Sticking to the EU, the FT editorial board commented: Slow motion swexitFollowing the failure of negotiations between Switzerland and the EU on closer economic relations Not good either..

up to date OECD Economic Outlook This shows that the pandemic is more damaging to trade in services than to goods. Pharmaceuticals, medical supplies, IT equipment..

on the other hand, Joint editorial In the Washington Post, the heads of the World Trade Organization, the World Health Organization, the IMF and the World Bank said: Invested $ 50 billion in immunization Returns $ 9 trillion in additional global production by 2025.

More than 20 Japanese companies jumped at the chance to save the country’s decline Semiconductor industry Along Funding of government initiatives Build a local factory with Taiwan TSMC Chip Manufacturing Group ($, subscription required). The government plans to establish a joint public-private organization in cooperation with TSMC and hopes to be awarded for improving the international competitiveness of Japanese industry.

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