Samsung SDI Co., a leading small lithium-ion battery maker, is jumping into the mining business of lithium to ensure steady supply of the crucial raw material to make electric vehicle batteries.
According to the South Korean Embassy in Chile on Thursday, Samsung SDI has qualified as one of the seven short-listed bidders for the lithium mining and refining project hosted by the Chilean state development agency CORFO. Twelve companies from seven countries had originally applied for the megadeal to industrialize lithium in Chile, home to the world’s largest lithium reserves. Three of the seven players that made the first cut were Chinese - Fulin Group, Jiangmen Kanhoo Industry Co. and Gansu DET Co. Other contenders include Russia`s TVEL/Rosatom, Belgium`s Umicore and Chile`s Molymet.
The final winner will be chosen by around January next year, and multiple winners can be selected, according to CORFO. The winner would be entitled to a steady supply of lithium at a favorable price.
Samsung SDI said its leading position in the world’s small lithium-ion battery market seemed to have been a major factor in advancing to the short list. Its local peers LG Chem Ltd. and SK Innovation Co. are keeping a close eye on the deal’s progress as it is the first time for a Korean battery maker to jump into the resource development business to secure raw materials.
Demand for lithium has recently surged after sales of electric vehicles skyrocketed from nearly zero a decade ago to more than half a million units last year. To keep up with lithium demand, producers have rushed to Chile to extract the precious mineral because Chile is part of South America`s "lithium triangle," which holds more than half of the world’s identified reserves of the mineral, according to the United States Geological Survey. The Chilean government has also been spurring lithium development at home by actively inviting foreign companies, as demand for the metal has boomed in recent years.
Some industry observers, however, saw Samsung SDI’s endeavor to make a foray into the global lithium mining business as a “lonely battle” as the Korean government’s interest in resources development overseas is “close to zero” unlike the Chinese government. To Samsung SDI, securing a stable supply of lithium is a must to compete against its global rivals, said industry experts.
Shares of Samsung SDI closed Friday unchanged at 191,000 won.
By Lee Jae-cheol
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]