Rare Earths Take Center Stage in Korea’s Supply Chain Strategy (Image courtesy of Yonhap)
SEOUL, Feb. 6 (Korea Bizwire) — As the global race for rare earth minerals intensifies, South Korea on Thursday announced a sweeping strategy aimed at securing stable supplies of the materials that underpin everything from electric vehicles and semiconductors to advanced weapons systems.
Often described as the “vitamins” of high-tech industry, rare earth elements are used in minute quantities but are critical to product performance. Their strategic importance has grown sharply in recent years, with China commanding roughly 70 percent of global production and more than 80 percent of refining and processing capacity.
Beijing’s use of export controls on rare earths has underscored their geopolitical leverage. In Washington, officials have acknowledged that Chinese restrictions could disrupt supply chains for artificial intelligence and semiconductor industries, amplifying concerns among allies heavily reliant on Chinese exports.
Against that backdrop, Seoul unveiled what it called a comprehensive rare earth supply chain plan built on a two-track approach: short-term stabilization and long-term self-reliance.
Industry Minister Kim Jung-kwan speaks at a meeting with rare earth–related companies held at Seonglim Advanced Industry’s Hyeonpung plant in Dalseong County, Daegu, on the morning of Feb. 5. (Photo courtesy of the Ministry of Trade, Industry and Energy)
In the near term, the government plans to deepen supply cooperation with China, taking advantage of improved diplomatic momentum following an early-year summit between the two countries. At the same time, it will more than double its strategic stockpiles to cushion potential disruptions.
But officials emphasized that stockpiling and diplomatic management are only stopgap measures. The broader goal is to gradually reduce overdependence on China.
To that end, the government intends to strengthen support for overseas resource development. It plans to expand funding and restore an overseas investment mandate to the Korea Mine Rehabilitation and Mineral Resources Corporation, contingent on organizational reforms, and to revise relevant legislation within the year.
South Korea is estimated to hold some 26 million tons of rare earth reserves domestically, though low commercial viability has deterred private investment. The government said it would explore generous incentives to assess the feasibility of domestic production.
Seventeen types of rare earth elements. Deng Xiaoping famously declared, “The Middle East has oil, and China has rare earth elements,” and used cheap labor and lax environmental regulations as weapons to dominate the global rare earth industry. (Image courtesy of Yonhap)
Other nations are pursuing similar strategies. Japan has accelerated efforts to diversify supplies, including deep-sea exploration, though the high costs of extraction remain a hurdle. The United States has proposed forming a trade bloc with allies to impose tariffs on low-priced critical minerals and establish minimum price guarantees for member-produced resources.
The European Union, under its Critical Raw Materials Act enacted in 2024, has launched 60 strategic projects worth roughly €28 billion, aiming to mine, refine and recycle significant portions of its consumption within the bloc.
Given the time and expense required to achieve full self-sufficiency, researchers at the state-run Korea Institute for Industrial Economics and Trade have urged Seoul to prioritize participation in U.S.- and EU-led supply chain alliances.
“South Korea cannot realistically build a fully self-contained ecosystem like the U.S., China or the E.U.,” said Kim Dong-soo, a senior researcher at the institute. “International cooperation is the practical solution.”
The government signaled that it intends to pursue both tracks simultaneously, coordinating with Washington and Brussels even as it seeks to fortify its own strategic reserves.
Ashley Song (ashley@koreabizwire.com)
