Super funds urged to support South Korea investment opportunities

Australia’s Chamber of Commerce representative in South Korea is calling for more support from superannuation funds to assist in attracting South Korean investment into Australia.

Australia’s Chamber of Commerce representative in South Korea has called on the super funds to play a part in luring the Asian nation as a greater investor into Australia. Picture: AFP

Australia’s Chamber of Commerce representative in South Korea is calling for more support from superannuation funds to assist in attracting South Korean investment into Australia, saying we have not given the Asian nation the attention it deserves.

Australian Chamber of Commerce in Korea chairman Ross Gregory said it was bemusing as to why trade and investment were not multiples larger than they are.

“We ought to be a much larger and diverse trading partner for Korea,” he said.

“The countries were brought together as allies in the Korean War, there is great friendship, no friction and our middle economy capabilities don’t conflict. We are in the same time zone, same region, adhere to the rules of law and there are no political issues.”

Mr Gregory, a former executive director at Macquarie Group and partner at the battery minerals and rare earths advisory group New Electric Partners, said South Korea did not receive the same attention as China and Japan

He called on the super funds to play a part in luring the Asian nation as a greater investor into Australia.

“They have done little to support critical minerals projects,” he said in the context of those the Koreans would be involved in.

Mr Gregory said Australian governments should consider setting up a fund to underwrite key projects and participate in the economic benefits at a time the demand side of electrification and energy transition was known with certainty.

He was speaking to journalists from Seoul as part of the Australia-Korea Media Exchange program backed by the Walkley Foundation, aimed at highlighting the two country’s strategic partnership, underpinned by areas such as complementary economies and shared security interests.

Ross Gregory, chairman of The Australian Chamber of Commerce in Korea.

Mr Gregory said Australia was at an important launching point to accelerate the relationship, especially as energy transition looms. Decarbonisation and the transition to electric vehicles is high on South Korea’s agenda as it looks to replace more of its carbon-intensive energy fuels such as LNG with green hydrogen alternatives as part of its quest to have 20 per cent of its power source as renewable energy by 2030.

LG Energy, a unit from the South Korean conglomerate LG, has provided $US250m ($370m) in funding for a 10-year offtake agreement with Liontown Resources to fund its Kathleen Valley lithium project in Western Australia. As part of the deal, convertible notes were issued to LG Energy that would give the South Korean group an 8 per cent stake in Liontown, backed by mining billionaire Gina Rinehart.

The Australian-listed Pilot Energy is also partnering with South Korean groups, with the country’s Samsung buying a 20 per cent interest in Pilot’s clean energy ammonia project this year.

Mr Gregory said more support was needed from federal and state governments to build on the countries’ important and enduring bilateral relationship.

In recent times, South Korea has had visits from Climate Change and Energy Minister Chris Bowen, Trade and Tourism Minister Don Farrell and Resources Minister Madeleine King, along with virtually all state and territory leaders.

Mr Gregory said Korea was very happy to share technology with allies and there were opportunities for joint ventures: “We still have a dig-and-ship mentality but we do not value add very well. This is the time for change.”

There were opportunities to make cathode material precursors, such as lithium and nickel, and active anode materials such as lithium alloyed metals and carbon graphite-based materials in the electric vehicle battery space, for example.

The trade and investment opportunity justified the government allocating more than single billion-dollar digits under the various Critical Minerals Debt Facility, National Reconstruction Fund and Future Made in Australia initiatives, he said. “Many projects are shovel ready but need equity investment,” he said. “We need to start by getting more critical minerals out of the ground.”

Mr Gregory said the South Korea market for Australian groups was still largely untapped, although South Koreans were more comfortable investing equity in renewable energy than in upstream critical minerals and rare earths projects where they tended to prefer offtake agreements without asset risk.

Both Australia and South Korea needed to unlock the potential Australia offers and encourage foreign direct investment into Australian projects.

“Australia is definitely open for business,” he said. “Australia can provide Korea with so many of the minerals and energy carriers that it needs and beyond that Australia has fantastic primary produce, biotech, food and beverage, sovereign technology such as quantum computing that Korea can consume and collaborate on. Korea has often been seen by Australia as the extra leg on a northeast Asian tour – this is changing but there is much more to do.”

* The author travelled to South Korea as a guest of the Walkley Foundation