CRITICAL MINERALSSouth Korea’s Demand for Critical Minerals
Korea’s geostrategic situation feeds a sense of strategic and economic insecurity—it is close to an assertive China prepared to demonstrate displeasure by imposing costly economic coercion measures, while the ever-present threat from North Korea drives the south’s priorities for military resilience, including a hi-tech military industry.
In December 2021 the then president of the Republic of Korea, Moon Jae-in, made a largely unexpected working visit to Australia, at the end of his term, and at unusually short notice. Media speculation was that the visit was all about China, given that both Australia and Korea had been subjected by China to costly economic coercion measures, and China’s aggressive actions continued to provoke concern in both countries.
The speculation was partially right, the visit was about China. But in fact it was about South Korea’s deep concern at the stranglehold China had on the production and refining of critical minerals, and an intent to build a closer reliable supply of them from Australia. Korea is poor in mineral and energy resources and has few reserves of critical minerals, but as a major global producer of batteries, semiconductors and EVs it has a compelling need for reliable supplies of them to fuel its industry.
Korea’s geostrategic situation feeds a sense of strategic and economic insecurity—it is close to an assertive China prepared to demonstrate displeasure by imposing costly economic coercion measures, while the ever-present threat from North Korea drives the south’s priorities for military resilience, including a hi-tech military industry. As well, Covid-19 and Russia’s war in Ukraine disrupted markets and associated supply chains, further elevating Korean perceptions of risk. The Trump administration’s ‘America first’ policies had already undermined global free trade commitments and confidence in the US-Korea alliance.
Underlying Korea’s policies is a compelling need to reduce these vulnerabilities, both strategic and economic, to build resilience and to position itself as a leader in advanced technologies. Korea is now an economic giant, heavily dependent on advanced manufacturing and exports for its continued economic prosperity and future growth, but one heavily exposed to international disruption. It is also focussed on the need domestically to transition away from its heavy dependence on imported fossil fuels, not least to meet international climate commitments to decarbonise, but to transform industry to a post-smokestack clean energy economy. Korea is committed to carbon neutrality by 2050.
