POSCO Future M approved a 396.1 billion won ($277 million) investment to establish a domestic spherical graphite production unit, marking South Korea’s first major step to reduce dependency on Chinese imports of this critical battery material.
The company will create a subsidiary tentatively named Carbon New Materials Co. to oversee production of spherical graphite, which is currently 100% imported from China. The move comes as battery manufacturers worldwide scramble to develop supply chains independent of Chinese materials, which dominate over 90% of the global anode market.
The strategic pivot aims to qualify for tax incentives under the US Inflation Reduction Act, which is expected to apply restrictions on foreign entities of concern for anode materials starting in 2027. POSCO has been actively diversifying its raw material sources by securing agreements with Australia’s Syrah Resources for graphite from Mozambique and accessing Tanzania’s Mahenge mine through its affiliate POSCO International.
Graphite, essential for lithium-ion battery anodes used in electric vehicles, requires intensive processing to transform raw material into high-purity spherical graphite suitable for battery production.
“By sourcing natural graphite from countries outside China and producing spherical graphite domestically, we can establish a fully independent anode material value chain,” a company official stated.
The investment highlights growing concerns across battery supply chains as China tightens export controls on critical minerals, threatening South Korea’s battery industry, which provides materials to major EV manufacturers globally.
POSCO Future M plans to integrate the new spherical graphite into its anode manufacturing process at its Sejong plant, completing a vital step in the battery value chain that will enhance both South Korea’s economic security and the company’s competitive position once foreign entity restrictions take full effect.
