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South Korea's Hyundai Motor Co and PT Adaro Minerals Indonesia Tbk have ceased an aluminum supply agreement after calls by a climate campaigner backed by K-pop fans. The call was against procuring supplies of the metal produced using coal power.
Agreement Termination and Exploration of New Opportunities
The Star reported that millions of young K-pop fans have thrown their weight behind various global campaigns and social causes, often leveraging social media. Hyundai Motor terminated its non-binding memorandum of understanding (MoU) with Adaro at the end of 2023, indicating that both companies have pursued other opportunities independently.
Wito Krisnahadi, director of PT Adaro Minerals Indonesia, confirmed the decision not to renew the agreement following its expiration.
Focus on Carbon Neutralization and Renewable Energy
The South Korean automaker entered the MoU with Adaro Minerals in 2022 to secure the right to purchase aluminum produced by PT Kalimantan Aluminium Industry, a subsidiary of Adaro. Hyundai aimed to procure aluminum, meeting its carbon neutralization policy amidst increasing demand among global automakers. The smelting of aluminum requires significant energy, with coal-based production resulting in substantial carbon emissions.
Transition to Hydropower for Sustainability
According to Reuters, Adaro plans to utilize a hydropower plant for the third phase of its aluminum smelter project, aligning with sustainability goals. The climate activist group Kpop4Planet hailed Hyundai's decision to end the agreement, attributing the victory to the collective efforts of environmentally conscious K-pop fans. Kpop4Planet intended to monitor Hyundai's sourcing practices to ensure environmental responsibility in its manufacturing processes.
The termination of the MoU between Hyundai Motor and Adaro Minerals highlights a growing trend among corporate giants to reassess their partnerships in light of environmental sustainability goals. This move has ignited conversations within the automotive industry about the importance of responsible sourcing and the potential impact of supply chain decisions on global carbon emission targets.
Photo: Hyundai Newsroom
