According to a new report, South Korea needs to reduce its dependence on China if it wants
to strengthen mineral partnerships with Europe, including Ukraine. This is because Europe is concerned about China’s growing dominance in the battery minerals market.
According to industry sources on the 4th, the East Asia Forum, an international policy forum under the Graduate School of Public Policy at the Australian National University, recently listed ‘resolving dependence on China’ as a prerequisite for South Korea to establish itself as a major lithium partner in Europe, including Ukraine.
The forum warned South Korea that it risks becoming overly dependent on China to secure the essential mineral. Korean companies have contacted China, which has dominated the global lithium market. The forum explained that last year, Korean companies such as Posco and SK On pushed for mineral cooperation with China, including lithium and nickel.
A close relationship with China can be a stumbling block when seeking mineral cooperation in Europe, including Ukraine. The European Union (EU) released a report last September expressing concerns about high dependence on China. It called for Europe to seek independence from China, saying that Chinese control of the global battery market could leave it vulnerable.
The forum pointed out that South Korea should distance itself from China for mineral cooperation with Europe and to comply with the American Inflation Reduction Act (IRA). The IRA stipulates that joint ventures with a 25% or more Chinese capital stake are designated as foreign concern organizations (FEOC) and excluded from subsidy recipients.
The forum suggested two major measures to distance from China. First, South Korea should participate in the US-led Mineral Security Partnership, encompassing the European Commission (EC) and individual European countries. It could also reduce dependence on Chinese companies by focusing on battery recycling. Core minerals can be extracted from waste batteries to alleviate supply concerns.
Lastly, the forum emphasized that South Korea needs to firmly establish itself as Ukraine’s Asian partner in the lithium extraction field and prove that it can participate in the European waste battery industry without worsening its dependence on China. Through this, it can be viewed as Ukraine’s potential long-term economic partner and a cooperating country of other European nations.
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