The Yoon Suk Yeol government’s move towards diversifying key mineral imports: A closer look at the background

China’s dominance in the rare earth minerals market is causing concerns for countries like South Korea, as they ramp up efforts to diversify their import lines to ensure economic security. With a high dependence on China for key minerals like rare earths, lithium, nickel, cobalt, and graphite, South Korea is taking proactive measures to reduce its reliance on a single source.

Last year, China accounted for 61.2% of South Korea’s rare earth imports, prompting the Yoon Suk Yeol government to take action. The Ministry of Strategy and Finance is in talks with Vietnam, Australia, and Indonesia to expand import sources and avoid supply shortages like the urea water crisis of 2021. The government aims to have multiple import lines to quickly respond to any crisis related to specific minerals.

With China being the top producer of rare earth minerals, the global situation and economic dynamics are constantly changing, leading to the need for international cooperation for a stable supply chain. Japan and France have already formalized cooperation in securing major minerals, which has influenced South Korea’s decision to initiate working-level discussions with key mineral-rich countries.

As countries continue to de-China their supply chains, experts are emphasizing the need for diversification and private sector involvement. Economists like Park Ji-hyung from Seoul National University underscore the importance of having multiple import lines and encouraging private sector participation in building secure supply chains.

As global demand for rare earth minerals continues to rise, it is becoming increasingly crucial for countries like South Korea to safeguard their economic interests by diversifying import sources and strengthening international cooperation in securing key minerals.