Posco Future M Co, which produces battery materials for companies including General Motors Co, is preparing to import graphite from Africa to reduce its dependence on supplies from China.

“Graphite is the most troubling part when making batteries,” CEO Kim Jun-hyung told reporters on Thursday. “We are importing 100% of natural graphite from China. But we are planning to bring natural graphite from Africa, such as Madagascar, and process it in South Korea.”

The move comes after China tightened export rules for graphite used for electric vehicle batteries in December, hitting Korean battery makers which rely heavily on the Chinese materials. South Korea imported 93% of its natural graphite and 95% of its synthetic graphite from China last year, customs data showed.

African-mined graphite could help Posco Future meet requirements under Washington’s Inflation Reduction Act, which is encouraging carmakers to be less reliant on Chinese components, Kim said. The company has been making synthetic graphite with needle cokes, a byproduct from steel plants, since February, and plans to ramp up that investment, he said

The Korean producer’s sister company, Posco International, signed a memorandum of understanding with Canada’s NextSource Materials in August 2023 to jointly invest in a graphite mine in Madagascar.

To meet demand for high-performance batteries, Posco Future is building a plant in Gwangyang to produce 52 500 t of nickel-cobalt-aluminum cathode, adding to its current capacity of 155 000 t of all kinds of cathodes. All the NCA cathode from the new plant will be supplied for Samsung, the battery maker for BMW and Rivian Automotive.

Posco Future is mass-producing so-called “single crystal, high-nickel” cathodes, a technology for increasing the driving range of EVs. It is supplying that product to Ultium Cells, the joint venture between General Motors and its battery maker, LG Energy Solution.