Seoul: The government has announced a comprehensive strategy aimed at strengthening South Korea's supply chains for rare earth elements amid the growing importance of such materials that are critical in many advanced industries but currently dominated by China.
According to Yonhap News Agency, the comprehensive plan, the first of its kind, is centered around boosting the country's capacities in every stage of rare earth supply chains, ranging from the upstream chain of resource development to the midstream chain of separation and purification of the elements, and the final downstream chain of turning the rare earths into usable materials, such as permanent magnets.
The Ministry of Trade, Industry and Resources has devised this plan as rare earth elements are essential to strategic industries, such as the semiconductor, electric vehicle (EV), and defense sectors, but the country relies heavily on foreign supply chains.
In the short term, the government will work to expand cooperation with China, a dominant force in rare earths, and other countries with abundant reserves, such as Vietnam and Laos, to prevent possible disruptions to supply chains.
South Korea will also seek expanded supply chain cooperation with major economies, including the United States, Japan, and Australia, while participating in global supply chain initiatives, such as the Indo-Pacific Economic Framework for Prosperity, the ministry stated.
At the same time, the government will actively support private-led overseas resource development projects while working to expand domestic infrastructure for rare earth production.
To this end, the government will expand the loan program for overseas resource development projects to 67.5 billion won (US$46.2 million) this year, a sharp increase from 39 billion won in 2025, and also increase policy finance.
For the internalization of rare earth production, it plans to extend support to companies investing in domestic production facilities and devise measures to increase domestic demand for such materials by prioritizing the stockpiling of locally produced rare earths.
Efforts will also be made toward facilitating an ecosystem of resource recycling to recover rare earths from used EVs and home appliances.
The ministry noted that the plan also includes a road map for independent development of technologies for separation and purification of rare earths, as well as those related to resource recycling.