South Korea and Canada have agreed to strengthen cooperation on critical minerals used to make batteries for electric vehicles(EV) as a response to a new U.S. law intended to reduce dependence on China for EV batteries.
According to the trade ministry on Thursday, LG Energy Solution signed three memoranda of understanding(MOUs) with Canadian mining companies to provide lithium and cobalt to its EV battery plants in the North American region.
The state-run Korea Mine Rehabilitation and Mineral Resources Corporation also secured an MOU with Canada’s Department of Natural Resources on Thursday to expand exchanges of information on key mineral resources.
The adoption of the MOUs was likely motivated by the U.S. Inflation Reduction Act which stipulates that no less than two-fifths of the critical minerals used in EV batteries should be either extracted and processed locally in the U.S. or with a free trade agreement partner, or recycled in North America.
More than 80 percent of South Korea's lithium hydroxide imports, a key raw material used in batteries, comes from China.