South Korea's POSCO International has signed a deal on the supply of natural graphite to strengthen its battery raw materials unit.
The company on Monday said it signed a contract with the Tanzania-based Faru Graphite, a subsidiary of the Australian company Black Rock Mining, on the supply of natural graphite from the African country.
POSCO International will spend $10 million (13.2 billion won) to import 750,000 tons of natural graphite over the 25 years of the mine's expected operation. The graphite will go to the global cathode materials plant of POSCO Future M, a POSCO Group affiliate.
Owned by Faru Graphite, the Mahenge mine is the world's second-largest for natural graphite in reserves. Global demand for graphite, a key raw material for manufacturing battery cathode materials, is highly dependent on China.
Through this contract, POSCO Group is expected to respond to the US Inflation Reduction Act by diversifying its suppliers. Market research company Benchmark Mineral Intelligence said global demand for natural graphite by 2035 is expected to jump 6.5 times from last year's supply.
“This is an example of supply that can confirm business synergy among group affiliates,” a company source said.
POSCO International is boosting its battery raw materials unit by reviewing the construction of plants for copper foil raw materials in North America and Europe.
