Posco Future M Co, a key supplier of battery materials for major companies like General Motors Co, is strategizing to import graphite from Africa to reduce its reliance on Chinese sources.
CEO Kim Jun-hyung stated, “Graphite poses significant challenges in battery production. Currently, we depend entirely on natural graphite imports from China.
However, we plan to source natural graphite from Africa, particularly Madagascar, and process it in South Korea.”
This decision follows China’s tightened export regulations on graphite for electric vehicle batteries, impacting Korean battery manufacturers heavily reliant on Chinese materials.
South Korea, according to customs data, imported 93% of its natural graphite and 95% of its synthetic graphite from China last year.
Importing graphite from Africa could help Posco Future meet criteria outlined in Washington’s Inflation Reduction Act, which encourages automakers to diversify away from Chinese components, explained Kim.
The company has already begun producing synthetic graphite using needle cokes, a steel plant byproduct, since February, with plans to expand this investment.
Posco Future’s sister company, Posco International, inked a memorandum of understanding with Canada’s NextSource Materials in August 2023 to jointly invest in a graphite mine in Madagascar.
In response to the growing demand for high-performance batteries, Posco Future is constructing a plant in Gwangyang to produce 52,500 tons of nickel-cobalt-aluminum cathode, supplementing its current capacity of 155,000 tons of various cathodes.
The NCA cathodes from this new facility will exclusively supply Samsung, the battery supplier for BMW and Rivian Automotive.
Furthermore, Posco Future has commenced mass production of “single crystal, high-nickel” cathodes, a technology aimed at enhancing the driving range of electric vehicles.
These cathodes are supplied to Ultium Cells, a joint venture between General Motors and its battery maker, LG Energy Solution.
