From Dependence to Partnership: Korea's Quest for Supply Chain Stability in Critical Mineral Resources

China boasts an indomitable presence in the global market of critical mineral resources (CMRs). Not only is China a major producer of many of these rare minerals, but the country is also the largest importer and exporter of the minerals used in the manufacture of secondary battery materials. It is unlikely that any other country will topple China’s position in the global mineral market for some time. The United States, Europe, and Japan have been reconfiguring their CMR supply chains over the last several years with the aim of reducing their dependency on China. Korean EV battery makers import 80 to 90 percent of the CMRs they need from China. Washington has sought to restructure its CMR supply chains since it first openly declared its intent to contain China in 2017. Beijing has responded by restricting exports of key minerals and increasing investment in joint ventures with businesses overseas. The Korean government has sought to respond to the growing uncertainty cast by the US-China rivalry over CMR supply chains by designing its own strategy for securing access to CMRs. It has since made law the Special Act on the Security of National Resources, which lays the legislative foundation for an early warning system, stockpiling, import diversification, and infrastructure expansion. At the more fundamental level, however, Korea needs to increase its cooperation with resource-rich countries with a view to establishing an integrated CMR ecosystem. In the short term, however the Korean government needs to grow public stockpiles of key minerals and quickly nurture companies capable of refining and processing raw minerals. Policy support and incentives are also needed to encourage the private sector to grow its own stockpiles. In the long term, Korea needs to build and maintain trust with China and redesign policies to minimize the risks of supply crises.