Visitors look around an LG Energy Solution booth at the InterBattery 2023 in Seoul on March 15, 2023. (Yonhap)
SEOUL, March 20 (Korea Bizwire) – Following the European Union’s release of the draft of the Critical Raw Materials Act last week, South Korean industries are busy exploring any possible ripple effects.
The Critical Raw Materials Act calls for not more than 65 percent of the EU’s annual consumption of each strategic raw material from a single third country.
It also stipulates that certain large companies will have to perform an audit of their strategic raw materials supply chains, comprising a company-level stress test.
The future tasks for the South Korean battery industry would include the diversification of core raw materials and waste battery recycling strategy.
At present, LG Energy Solution Ltd. runs a production factory in Poland, while SK On Co. and Samsung SDI Co. operate production lines in Hungary.
“This means that they will identify vulnerabilities by assessing whether the proportion of raw materials sourced from a specific country is high and whether it could potentially bring about uncertainty in future supply,” an industry source said.
South Korea’s car industry is also paying keen attention to the EU’s latest move.
The European Commission included the recycling ratio of permanent magnets, one of core components of electric vehicle motors, and the disclosure requirements on recycling capability information as a separate provision in the draft.
Hyundai Motor Co. is currently producing Kona electric vehicles in the Czech Republic. Previously, Kia Corp. revealed a plan to launch EV production at the company’s Slovakia plant from 2025.
J. S. Shin (js_shin@koreabizwire.com)
