[Exclusive] Government Lithium Reserves Enough for Only 12 Days Over 3 Years

Delay in Centralizing Rare Metal Stockpiles for Years
Concerns Over Gaps in Systematic Management of Critical Minerals
Transfer Costs Up to 120 Billion Won... 10 Billion Won Decrease Next Year

Jong-wook Lee, Administrator of the Public Procurement Service, Visits Gunsan Stockpile Base to Inspect Supply Chain Management
(Gunsan=Yonhap News) Jong-wook Lee, Administrator of the Public Procurement Service (left), visited the government stockpile base in Gunsan, Jeonbuk, on the 26th to inspect the stockpiling and supply status of raw materials. May 26, 2022. [Provided by the Public Procurement Service. Redistribution and DB reproduction prohibited]
Photo by Yonhap News
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It has been confirmed that the previous administration left the lithium stockpile, a key raw material for electric vehicle battery materials, at a level equivalent to only 12 days?less than half of the target?for three years. As the government's efforts to unify the stockpiling of rare metals have been delayed for years, there are concerns that systematic management of some critical minerals has been compromised.

According to data submitted on the 13th by the Public Procurement Service and the Korea Mine Reclamation Corporation to the office of Rep. Gu Ja-geun of the People Power Party, the government's lithium stockpile was recorded at 12.3 days as of last month. This is only 22.4% of the government's target lithium stockpile days (up to 55 days), marking the lowest level. Looking at the government's lithium stockpile days over the past five years, it decreased from 19.1 days in 2017 to 17.2 days in 2018, and then to 12.3 days in 2019, and has not recovered since. The government’s stockpile days are calculated by dividing the stockpile (inventory) amount by the target stockpile amount and then multiplying by the target days. Applying this, the government’s target lithium stockpile is estimated at about 2,600 tons, while the actual stockpile is about 580 tons, indicating a shortage of more than four times.

The cause of the government’s long-term neglect of the lithium stockpile, which is far below the target, is attributed to the rare metals stockpile unification process initiated in June 2019. At that time, the government agreed to transfer nine types of rare metals (silicon, cobalt, vanadium, lithium, strontium, manganese, indium, bismuth, tantalum) held by the Public Procurement Service under the Ministry of Strategy and Finance to the Korea Mine Reclamation Corporation under the Ministry of Trade, Industry and Energy as part of the ‘Improvement Plan for the Metal Resource Stockpile System.’ However, the transfer has not been properly carried out to date, causing setbacks in plans to expand new lithium stockpiles.

The enormous transfer costs have also been an obstacle. According to the Korea Mine Reclamation Corporation, the estimated budget required to transfer all nine rare metals from the Public Procurement Service amounts to up to 120 billion KRW. The corporation failed to secure the budget needed for the transfer this year and only applied for about 10 billion KRW next year for cobalt procurement. Experts have expressed concerns that if the government’s lithium stockpile, whose importance is growing as a future core material, remains insufficient for a long time, the mineral loan benefits that could go to small and medium-sized enterprises with poor raw material supply may be reduced.

In response, the government is actively promoting strengthened supply chain cooperation centered on mineral-rich countries such as Canada, Australia, and Chile. On the 11th (local time), Prime Minister Han Duck-soo visited Chile and discussed cooperation plans for key minerals including lithium with President Gabriel Boric, and Minister of Trade, Industry and Energy Lee Chang-yang met with Australian ministers and local companies the day before to promote investment and trade activation.

A representative of the Korea Mine Reclamation Corporation said, "The budget application amount for next year’s transfer has not yet been finalized," adding, "We will proceed with a phased transfer considering the future securing of transfer budgets and the importance of domestic industries comprehensively."