{"id":2204576,"date":"2024-04-08T16:10:10","date_gmt":"2024-04-08T07:10:10","guid":{"rendered":"https:\/\/koreapro.org\/?p=2204576"},"modified":"2024-04-08T18:18:15","modified_gmt":"2024-04-08T09:18:15","slug":"us-china-trade-war-pushes-south-korean-companies-to-invest-in-africa","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/04\/us-china-trade-war-pushes-south-korean-companies-to-invest-in-africa\/","title":{"rendered":"US-China trade war pushes South Korean companies to invest in Africa"},"content":{"rendered":"
As South Korean companies shift their supply chains to Africa for critical minerals, they face significant challenges due to inconsistent economic policies and a lack of reliability, robust trade financing and continuity.<\/span><\/p>\n The <\/span>Interbattery Forum 2024<\/span><\/a>, held in Seoul in March, highlighted the intensifying competition between South Korean and Chinese battery-making companies as they fight to expand their market share and secure a stable supply of raw materials.<\/span><\/p>\n Electric vehicle batteries require critical minerals such as nickel and graphite. South Korean manufacturers have relied heavily on Chinese mines to acquire these minerals, with 95% of the graphite used in South Korean factories in 2023 being <\/span>shipped from China<\/span><\/a>, the world\u2019s top graphite producer.<\/span><\/p>\n However, increasing tensions between Washington and Beijing have put South Korea in an uncomfortable position, prompting companies to explore alternative sources for critical minerals.<\/span><\/p>\n The U.S. Inflation Reduction Act (IRA), which aims to shut China out of America\u2019s battery supply chain, offers a <\/span>$7,500 tax credit<\/span><\/a> to manufacturers if most of their batteries\u2019 critical minerals have been extracted or processed in the U.S. or a country with which it shares a free-trade agreement. In response, China has tightened its <\/span>export controls<\/span><\/a> on graphite, a crucial component for lithium-ion batteries.<\/span><\/p>\n To mitigate these risks and reduce their reliance on China, South Korean companies are turning to Africa, which boasts significant reserves of critical minerals. By investing in African mines and establishing partnerships with local governments and businesses, South Korean firms hope to secure a stable and diversified supply chain for their battery production.<\/span><\/p>\n