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| South Korean President Moon Jae-in, left, with Australia-Korea Business Council Chairman Simon Crean and Executive Director Liz Griffin during talks with critical minerals developers in Sydney, Australia, on Dec. 14. |
South Korean President Moon Jae-in's visit to Australia on Dec. 14 will unlock investment by the east Asian country into Australia's critical minerals mining sector, an executive in the meeting told S&P Global Market Intelligence.
South Korea is one of Australia's largest customers for metals, and the country, a major global battery maker, is looking for new sources of critical minerals outside of China. On Dec. 14, President Moon and his trade minister met Cobalt Blue Holdings Ltd. CEO Joe Kaderavek; Australian Strategic Materials Ltd. Chairman Ian Gandel; Queensland Pacific Metals Ltd. Managing Director Stephen Grocott; and Australia-Korea Business Council, or AKBC, Executive Director Liz Griffin and Chairman Simon Crean, among others, in Sydney.
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| Mixed hydroxide precipitate circuit at Cobalt Blue Holdings' Broken Hill pilot plant, New South Wales. |
"What they've announced, and what they will be announcing over the course of the next six months, are multiple stages of an increasingly positive critical minerals policy," Kaderavek, who counts Seoul-headquartered LX International Corp. as a major investor, told S&P Global Market Intelligence, regarding South Korea's role in Australian mining and processing.
South Korea is Australia's fourth-largest trading partner and third-largest export market, valued at almost A$26 billion, according to the AKBC. South Korean steelmaker POSCO is Australia's single-largest customer.
South Korea and Australia both highlighted the meeting with a suite of new commitments. Australian Minister for Resources and Water Keith Pitt signed a memorandum of understanding on cooperation in critical mineral supply chains on Dec. 13 with South Korea's Minister for Trade, Industry and Energy, Moon Sung-wook. On the same day, Australian Prime Minister Scott Morrison made an initial commitment of A$50 million to the low- and zero-emissions technology partnership he signed on Oct. 31 with President Moon during bilateral talks at the G20 summit in Rome. Together, the governments aim to invest up to A$100 million towards initiatives under the partnership.
"Both governments have effectively understood that these projects are difficult to finance from traditional lenders, because we run very high-tech flow sheets," Kaderavek said. "So each project must be assessed under more innovative lending criteria and more positive government support, otherwise they simply won't get off the ground."
Seoul was one of the first to realize the issues with critical materials worldwide and has had an active view on how to de-risk their supply chain for at least the last five years, Australian Strategic Materials Managing Director David Woodall said in an interview.
More than A$500 million in investments have been pledged by South Korean corporates to Australian mining projects in the last two years alone.
"It's a big deal. It's not loose talk. There is significant change coming that will enable Australian critical minerals," the Cobalt Blue CEO said.
Investments on the way
In October, the head of South Korea's newly established critical minerals planning team called for greater engagement with Australia to facilitate further investment in mining and processing capacity Down Under. Since then, a number of agreements have been struck.
Queensland Pacific announced Dec. 15 that it has secured conditional finance support from federal credit agency Export Finance Australia for up to A$250 million of debt funding for its planned TECH nickel-cobalt project in Queensland, Australia.
Australian Strategic Materials signed a joint statement of cooperation Dec. 14 with the Korean Resources Corporation for the supply of critical minerals and metals into South Korea from its Dubbo rare earths project in New South Wales. The company had also received US$4.5 million in grants in June 2020 as part of the South Korean government's US$5 billion program to develop a low-emission, high-purity metal refining technology that can be applied to zirconium, titanium and rare earths for permanent magnet alloys.
Such support came because Australian Strategic Materials can "produce products they actually need in Korea," enabling the likes of Hyundai Motor Co. to make 1 million electric vehicles a year from 2025 and grow that market over time, Woodall said.
The company's metals plant being built in Ochang Province, South Korea, is close to manufacturers LG Chem Ltd., Samsung SDI Co. Ltd., SK hynix Inc. and Hyundai Mobis Co. Ltd., according to Woodall. The neodymium part of the plant is currently in the commissioning phase.