South Korea seeks closer China cooperation on rare earth supply
South Korean Industry Minister Kim Jung-kwan speaks at a meeting with companies in Daegu Thursday to discuss the government’s measures to stabilize the rare earth supply chain. Photo courtesy of South Korea Ministry of Trade, Industry and Resources
SEOUL, Feb. 5 (UPI) — South Korea will seek closer cooperation with China to stabilize supplies of rare earth minerals critical to its high-tech industries, the government said Thursday, as Seoul unveiled a strategy to strengthen supply chain security.
The Ministry of Trade, Industry and Resources announced a comprehensive plan calling for expanded cooperation channels with Beijing, including the establishment of a government-to-government hotline and joint consultative body to help prevent supply disruptions.
The initiative comes as South Korea, one of the world’s top high-tech exporters, remains heavily reliant on imported raw materials essential to manufacturing.
“South Korea has developed advanced industries such as semiconductors, electric vehicles and batteries, but as a resource-importing country, we face many challenges in managing supply chains,” Industry Minister Kim Jung-kwan said during a visit to a rare earth magnet manufacturer in Daegu.
“Our national competitiveness depends on industrial resource security, and the government will focus its policy capabilities on building a resilient industrial structure that is not shaken by external changes,” he said.
Rare earth elements — a group of 17 metals used in components such as permanent magnets, electric motors and advanced electronics — are widely considered vital to next-generation manufacturing. China’s dominance of rare earth processing and refining has left global manufacturers vulnerable to export controls and geopolitical tensions.
Under the plan, South Korea will designate all 17 rare earth elements as core strategic minerals and create new customs classification codes to improve monitoring and demand forecasting.
Seoul also aims to expand domestic production and recycling capacity through regulatory reforms and subsidies for new facilities, while creating a dedicated rare earth research and development fund under an existing industrial innovation investment program.
To support overseas supply diversification, the government will increase policy loans for overseas resource development to $46.2 million this year, up from $26.6 million in 2025, while expanding the state financing coverage ratio to 70% from 50%, the ministry said.
Beyond China, South Korea said it will pursue supply partnerships with countries including Vietnam and Laos as part of efforts to diversify procurement channels and reduce reliance on any single supplier.
The announcement comes a day after South Korea was tapped to chair Washington’s Forum on Resource Geostrategic Engagement, or FORGE, a U.S.-led framework aimed at strengthening supply chain resilience among allied economies for critical minerals and emerging technologies.