SEOUL, Feb 5 — South Korea is seeking closer cooperation with China on critical mineral supply chains, its trade ministry said today, as Seoul unveiled plans to secure stable supplies of rare earth elements (REE) needed for cutting-edge technologies.
The announcement comes after South Korea this week joined a United States-led trade bloc for critical minerals with allies and partners that aims to guard against heavy reliance on China for materials strategically critical to advanced manufacturing.
The trade ministry said it would establish a hotline and joint committee with Chinese authorities to help South Korean companies import Chinese minerals more quickly and reliably.
South Korea, which is home to leading semiconductor, electric-car battery and petrochemical companies, lacks a full supply chain for rare earths, the ministry said in a statement.
Authorities will designate 17 critical minerals needed for national security and tighten monitoring and analysis on their supplies in order to prevent an unexpected shortage, it said.
To diversify sourcing, Seoul will also cooperate with other countries including the US, Vietnam and Laos, the ministry said. The government plans to allocate 250 billion won (RM673.8 million) of state funds to support local companies developing overseas mines.
In October, Beijing expanded control over its rare earths, including extra scrutiny for semiconductor users. At the time, South Korea’s trade ministry said China’s monopoly on REE increased instability in global supply chains.
Yesterday, South Korea was picked to chair a preferential trade bloc for critical minerals, dubbed the Forum on Resource Geostrategic Engagement, or FORGE, unveiled by Washington in an effort to safeguard supply chains from being used by any one country as a tool of geopolitical leverage.
While the US has aggressively looked for ways to secure supplies of critical minerals after Beijing last year wielded its dominance by curbing exports, South Korea has taken a more diplomatic approach with China to address the stability of the supply of materials critical to its manufacturing sector.
South Korean Foreign Minister Cho Hyun told a meeting in Washington that Seoul, which will chair the bloc through June, would boost coordination with partners and help promote investment in projects to secure supply chains, the ministry said.
