Korea turns to Africa as China tightens graphite export curbs

Minister for Trade Ahn Duk-geun, second from right, speaks to Tanzanian Minister of Minerals Anthony Peter Mavunde, second from left, at the minerals ministry's headquarters in Tanzania's capital of Dodoma, Nov. 8. Courtesy of Ministry of Trade, Industry and Energy Korea boosts ties with Tanzania, Mozambique, Madagascar By Park Jae-hyuk Korean companies and the government are shifting their focus to Africa from China to secure graphite, as Beijing attempts to control exports of the core mineral for rechargeable batteries next month, according to industry officials, Thursday. In an apparent retaliation against Washington’s trade restrictions, Beijing announced last month that Chinese exporters will be required to apply for permits to ship high-purity, high-hardness and high-intensity synthetic graphite, natural flake graphite and products made using the mineral. Although the leaders of the U.S. and China met on Wednesday on the sidelines of the APEC Summit in San Francisco, they maintained different views regarding the export controls targeting rival countries. Given that Korea has relied heavily on Chinese graphite, lingering uncertainties have led to various efforts to diversify suppliers of the mineral. POSCO International, for example, is considering additional investments to secure a bigger stake in a graphite mine in the Tanzanian town of Mahenge. The trading company under POSCO Group currently holds a 15 percent stake in the mine after signing an off-take agreement in May to buy 750,000 tons of natural graphite over the next 25 years. An off-take agreement involves the purchase of all or a substantial portion of a resource producer's future output. It also signed a memorandum of understanding in September to double that amount. In Madagascar, POSCO International plans to obtain 30,000 tons of graphite annually over the next decade. “Due to the U.S. Inflation Reduction Act (IRA), non-Chinese graphite will be necessary from 2025 for anode materials supplied in North America,” a POSCO International official said. You Sam, front row left, head of POSCO International's green materials department, signs a memorandum of understanding with NextSource CEO Craig Scherba, front row right, in Madagascar's capital of Antananarivo, Aug. 28. Courtesy of POSCO International STX, another Korean trading firm that won the right to trade graphite from the Caula mine in Mozambique, will start selling the mineral next year. The company is also in talks for additional off-take agreements in the East African country. “Tensions are escalating over the global supply of core minerals and raw materials in the wake of the U.S. IRA and China’s retaliatory restrictions on graphite exports,” STX CEO Park Sang-jun told employees last week. “We will widen and strengthen our supply chain to turn the crisis into an opportunity in the resource war,” Park added. Minister for Trade Ahn Duk-geun also visited Tanzania on Nov. 8 as a special presidential envoy to discuss deeper cooperation in the supply of minerals with the African country’s Minerals Minister Anthony Peter Mavunde. “As China’s export restrictions have increased the possibility of Korea facing difficulties in securing graphite, it will be important to cooperate closely with Tanzania, which has considerable graphite reserves,” the Korea Trade-Investment Promotion Agency (KOTRA) said in a recent report. The Korea International Trade Association also advised Korean companies to diversify the suppliers of graphite to include ones in Mozambique, as well as Brazil and Japan.