For the stabilisation of supply chains, the South Korean government will extend loans, guarantees, and insurance for businesses in the industry apart from boosting financial support for companies that refine and reuse minerals
South Korea to offer $29bn funding over the next five years to boost its battery industry. (Credit: Lee Rosario from Pixabay)
The government of South Korea is set to offer over KRW38 trillion ($28.8bn) in policy financing for the country’s secondary battery industry in the upcoming five years.
Through the funding, the government aims to bolster South Korea’s battery sector in response to the intense global competition to secure battery supply chains.
For stabilising supply chains, the government will extend loans, guarantees as well as insurance for businesses in the industry. It will also boost financial support for companies that refine and reuse minerals.
Besides, the South Korean government will offer interest and insurance premium reductions for facility investment in response to the US Inflation Reduction Act.
It will also work towards creating an industrial ecosystem that will promote the recycling of eligible used batteries into products instead of throwing them away as waste. This is expected to reduce reliance on important minerals used in secondary battery production from overseas.
South Korean battery companies such as LG Energy Solution, Samsung SDI, and SK On had a 49% share of the worldwide battery market excluding China as of last year, reported Reuters, citing a joint statement from several ministries.
The statement also added that the dependence of the companies on foreign countries for key materials made diversification essential, said the news agency.
According to various reports, Seoul also seeks to extend stockpiles as part of the initiatives to stabilise the supply chains of key minerals.
The extension will include an additional 24 days’-worth of lithium and an investment of more than KRW250bn ($189.5m) in 2024 for supporting mineral refining and smelting.
Earlier this year, South Korea announced KRW7 trillion worth loans and guarantees to support its battery firms’ and material suppliers’ investments in facilities within North America through the next five years.