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The strategy for securing reliable critical minerals supply

Last updated: 18 July 2024

The strategy for securing reliable critical minerals supply is a follow-up measure to the President's order to establish a critical mineral supply chain centered around the Ministry of Trade, Industry and Energy (MOTIE). The plan aims to mitigate Korea's reliance on imports from a select few countries for lithium, cobalt, graphite, and other critical minerals from the current 80% to 50% by 2030. It is set to maximize utilization of domestic mineral resources as well as contribute to supply chain stabilization as Korea envisions growing into a high-tech industrial powerhouse.
Key strategies to secure reliable supply of critical minerals are as follows:
1. Select 33 critical minerals and 10 strategic critical minerals. The former will be under management to ensure economic security and the latter will be under intensive management to ensure stable supply chain of high-tech industries such as semiconductors and secondary batteries.
33 Critical Minerals: Li, Ni, Co, Mn, Graphite, REEs (Nd, Dy, Tb, Ce, La), Nb, Cu, Al, Si, Mg, Mo, V, PGMs (Pt, Pd), Sn, Ti, W, Sb, Bi, Cr, Pb, Zn, Ga, In, Ta, Zr, Sr, Se
10 Strategic Critical Minerals: Li, Ni, Co. Mn, graphite, REEs (Nd, Dy, Tb, Ce, La)
2. Develop a global minerals supply map and an early warning system. The supply map indicates mines of critical minerals and the early warning system provides a notification of supply chain risks in advance. The stockpile of critical minerals will be reinforced to suffice for 100 days from the current 54, and prefeasibility studies will be launched for critical mineral bases. In times of emergency, companies that need certain resources will be supplied within an 8-day window through a swift distribution system to counter supply and demand shock.
3. Strengthen international cooperation. Utilise high-level diplomacy with resource-rich nations and memorandums of understanding (MOUs) as channels for bilateral cooperation in critical minerals. Minerals Security Partnership (MSP) and other multilateral forms of collaboration can serve opportunities for domestic companies to stably enter overseas projects.
4. Mitigate supply risks. Public institutions are to conduct pre-emptive investigations on high-risk projects demanding high level of expertise to mitigate private-led project risks in overseas mining. For global projects and multiparty bid projects, public institutions are to first conduct a project feasibility analysis, then reach out to private company investments once a project is assessed to be promising.
5. Encourage financial assistance and investment. Promote guarantee system of public institutions to reinforce financial assistance such as loans and insurance for the opening of local mining subsidiaries in order to support firms’ critical minerals investment. If mining project fails, the burden of tax on dividends is to be mitigated by extending the scope of deductible expenses.
6. Develop interagency collaboration. Collaborate across ministries to create a cycle system for waste resources generated from using EVs and secondary batteries.
7. Develop the public critical minerals infrastructure. The government is to build an effective critical minerals infrastructure by establishing legal grounds and train up professional manpower in recycling, and strengthen the development of sustainable smelting technology in consideration of ESG (Environmental, Social, Governance).

The strategy supports recycling by:

  • Setting the objective of increasing the recycling rate of critical minerals from the current 2% to 20% by 2030;
  • Establishing demonstration centres and clusters to support SMEs and middle-market companies in recycling EVs and secondary batteries;
  • Fostering inter-ministry collaboration to create a circularity system for waste resources from EVs and secondary batteries; and
  • Training up professional manpower in recycling.

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