▲Heo Cheol-ho, Director of the Korea Institute of Geoscience and Mineral Resources


Battery Venture Capital Investments, 60% Focused on Lithium-ion Battery Development
Indonesia expected to account for 2,534kt of 4,464kt nickel supply in 2030
Net-Zero and LFP High-Nickel Battery Growth Leads to Decrease in Cobalt Demand

An opportunity has been created to hear about the current status and outlook for key minerals such as lithium, nickel, and cobalt, which have experienced significant growth due to the expansion of the electric vehicle market.

Heo Cheol-ho, head of the Korea Institute of Geoscience and Mineral Resources, presented on the ‘Global Battery Mineral Supply and Demand Status and Outlook’ at the ‘Global Battery Mineral Core Mineral Seminar’ hosted by the Korea Mineral Resources Agency and the Battery Industry Association at COEX on the 8th.

In 2022, there will be more than 26 million electric vehicles on the road worldwide, up 60% from 2021 and about five times the number in 2018. As electric vehicles grow, global battery demand will also increase by more than 65% in 2022 compared to the previous year.

When looking at the changes in battery cathodes from 2018 to 2022, high-nickel batteries were mainstream, but the share of LFP batteries increased from 2020, and LFP batteries will account for about 30% of light electric vehicles in 2022.

When Chief Huh analyzed the major financial statement changes of the top 100 mining companies from 2016 to 2022, he found that companies related to battery minerals, In particular, lithium-related companies are showing better profitability, market capitalization, and margins than traditional coal and iron ore-related companies, it said.

The top 20 mining companies are spending heavily, continuing to increase their investments in battery-critical minerals by 20% year-on-year in 2021 and by more than 30% year-on-year in 2022.

He announced that although the price of battery minerals has fallen significantly last year, it is still higher than the average price and 60% of battery venture capital investment is focused on lithium-ion battery development because lithium has high economic feasibility.

In addition, due to technological advancements and economies of scale, the cost per kWh, which was close to $1,000 in 2011, has fallen to below $200 in 2022. However, the proportion of the core minerals of the battery itself in the cost has increased significantly, from about 3% to 40%.

Chief Heo Cheol-ho continued his discussion on future scenarios for key battery minerals.

Wood Mackenzie projects that while in 2022 only 15% of total nickel production was used in batteries and 64% in stainless steel, the gap will narrow to 27% in batteries and 57% in stainless steel by 2030.

Indonesia, which has abundant nickel reserves, supplied 1,690 kt of the 3,525 kt of nickel in 2022 and is expected to remain healthy in 2030, accounting for 2,534 kt of the 4,464 kt in 2030.

Cobalt, which is considered a key raw material for ternary batteries, is expected to be replaced by other minerals due to net zero by 2050.

Demand for battery minerals for clean energy resulting from the net-zero scenario is expected to increase by about 3.5 times by 2030, driven by increased demand for LFP batteries and the development of high-nickel batteries.Demand for cobalt is expected to decrease sharply, analyzed Director Heo Cheol-ho.

The electric vehicle industry, which has grown mainly in advanced countries such as the U.S., Korea, and Europe, is also showing signs of growth in emerging and developing countries.

“With Argentina announcing a scenario to stop selling internal combustion engine vehicles by 2040 and Chile by 2030, the world is raising its voice to join in responding to climate change,” said Director Huh Cheol-ho.

Meanwhile, Yoo Beom-min, Director of the Ministry of Trade, Industry and Energy's Resources Industry Policy Bureau, introduced the progress of the implementation of the 'Key Mineral Securing Strategy' that the government has been promoting since February, and said that, in accordance with the above strategy, the government has made steady efforts to ease dependence on imports of minerals from specific countries and increase the stability of the supply chain.

▲ Yoo Beop-min, Director of Resource Industry Policy Bureau, Ministry of Trade, Industry and Energy

Core minerals are key elements that make up products and determine their quality in various industries, but our country relies on imports for most of the core minerals.

In February last year, the government announced a strategy to secure key minerals in order to respond promptly to the crisis in the supply and demand of key minerals and to ensure the sustainable development of the nation's cutting-edge industries.

The government is strengthening cooperation with countries that possess key minerals, actively participating in multilateral consultative bodies such as the International Energy Agency (IEA) to strengthen resource diplomacy, and has shown moves to respond to resource security crises by enacting a special law on national resource security.

Also, investment taxWe are also promoting the establishment of clusters and demonstration centers for recycling waste resources such as used batteries.

Director Yoo said, “Securing key minerals is an essential task for national economic growth and security,” and added, “The government will continue to strengthen international cooperation on key minerals with resource-rich countries, quickly establish key mineral reserve bases and recycling clusters, and strengthen public-private cooperation to do its best to stabilize the key mineral supply chain.”

He continued, “I believe that establishing a stable supply chain for key minerals is possible only when the government and companies work together and make strategic investments,” adding, “I firmly believe that if the efforts of individual companies come together, it will result in improved competitiveness for our country’s battery industry.”