[The Editors' Verdict]In the End, Resource Development Is the Answer

Recently, the U.S. government has demanded management secrets from Samsung Electronics, SK Hynix, and others to secure dominance in its domestic industry. Amid this, the China-originated 'supply chain shock' has overlapped, accelerating the global resource crisis.

The 'supply chain shock' is affecting not only the semiconductor industry but also the battery industry. The three major domestic battery companies, which have recently embarked on aggressive battery business expansion, are on high alert. As the government has given up on securing resources, the responsibility for securing key mineral resources has fallen to private companies. In reality, government investment in the resource securitization of raw minerals is almost nonexistent. Currently, due to the global eco-friendly and low-carbon drive, demand for battery materials is expanding, causing raw material prices to surge sharply compared to the beginning of the year. Prices of key battery materials such as lithium, cobalt, manganese, and aluminum have soared compared to early this year. Lithium alone has jumped 231.5%, and manganese has risen 78.9%.

According to market research firm SNE Research, the lithium supply shortage, which is about 10,000 tons this year, is expected to surge to 189,000 tons by 2025. Securing raw materials necessary for semiconductor production is also a problem. Tungsten and silicon (for metal silicon) are essential materials in the semiconductor Nancy-Plansee process. Tungsten is a core material for semiconductor metal wiring, defense industry, and machine tools. Silicon is not only a basic material for semiconductor wafers but also an essential raw material for solar metal silicon.

According to the U.S. Geological Survey (USGS), China accounted for 82.1% of the world's tungsten production and 67.5% of silicon production as of last year. Magnesium, used in aerospace, automotive, and smartphone materials, has a Chinese market share of 90%. China and Japan have already been making large-scale investments in South America and Africa to secure key battery raw materials such as lithium, nickel, and cobalt. If China, one of our major export countries, continues to sweep up global resources, it will inevitably be disadvantageous to us. Earlier this year, Wang Yi, China's Foreign Minister, visited cobalt-rich Congo and conducted bold resource diplomacy by partially forgiving loans, supporting China's top electric vehicle battery company CATL in acquiring 25% of Congo's Kisanfu copper-cobalt mine. Japan has been developing overseas mines for several years, led by general trading companies such as Sumitomo, Mitsubishi, and Itochu, along with the government agency JOGME (Japan Oil, Gas and Metals National Corporation).

The semiconductor core material export restrictions imposed by Japan two years ago highlighted the importance of material self-reliance and securing national industrial stability. Recently, semiconductor raw material prices have tripled, making it difficult to find alternative import routes. Although efforts are underway to secure raw materials from Australia and South America, they are being unilaterally manipulated. Domestic companies, facing the urgent threat of supply route blockades, are making every effort to secure raw materials and respond to supply issues, but anxiety remains due to price fluctuations and supply instability factors.

South Korea made some progress in overseas resource development during the previous administrations by leveraging the Korea Resources Corporation (now the Korea Mining and Resources Corporation), but it entered a stagnation phase during the Park Geun-hye and Moon Jae-in administrations.

The government currently plans to sell all overseas mining rights held by the Korea Resources Corporation, including copper, nickel, and thermal coal. The value of overseas mine shares recently secured by the Korea Resources Corporation has risen significantly. Resource development is an industry where even if you jump in now, it takes 10 to 20 years to see results. For the future, we urge the government to implement policies to re-engage in resource development.

Kang Cheon-gu, Invited Professor, Department of Energy Resources Engineering, Inha University