POSCO International is redirecting its focus to secure natural graphite supply from Africa.

South Korean battery manufacturer, POSCO Future, has been importing 100% of its natural graphite from China but plans to use feedstock sourced from Africa and process it in South Korea, according to its CEO in a recent interview with Bloomberg. As a result, POSCO has announced three separate natural graphite supply agreements with African graphite miners. These include Syrah Resources Balama mine in Mozambique, NextSource’s Molo mine in Madagascar and Black Rock’s Mahenge mine in Tanzania for 24-60ktpy, 30ktpy and 60ktpy graphite concentrate, respectively. In addition to this, NextSource is developing a vertically integrated battery anode material (BAM) plant in Mauritius and will supply POSCO with 15ktpy coated spherical, and purified graphite (CSPG) as part of their agreement.

These agreements are in line with POSCO’s strategic direction to reduce its reliance on Chinese material and the company’s plans to expand its South Korean processing facilities natural graphite anode material production capacity from ~74ktpy to 154ktpy and 182ktpy by 2026 and 2030, respectively. When producing lithium-ion battery graphite active anode materials (AAM), both natural and synthetic graphite can be used. POSCO will continue to use both synthetic and natural graphite, including natural graphite material from China. In 2021, the company, acquired a 13% stake in a Chinese graphite processor Qingdao Zhongshuo New Energy Technology, through its subsidiary POSCO Chemical, now POSCO Future M, and has been importing spherical graphite material since 2022. Additionally, POSCO will also use synthetic AAM from its integrated facility located in Pohang, South Korea, which has a production capacity of 8ktpy synthetic AAM that POSCO is also planning on expanding to 18ktpy.

The shift away from Chinese graphite material by OEMs is driven in part by companies trying to meet requirements under the USA’s Inflation Reduction Act (IRA) and recent graphite export restrictions implemented by China's Ministry of Commerce in December 2023. This has created an opportunity for African graphite miners to enter the market and potentially become suppliers for key importers such as South Korea and Japan, which currently rely on Chinese graphite products, to diversify their graphite supply. In another example, South Korean battery manufacturer DA Technology entered into a supply agreement in January 2024 with Vietnam Graphite Group for 20ktpy of natural graphite concentrate.