South Korea Builds Mineral Alliances With Washington While Keeping China Supply Channels Open

Two Diplomatic Moves Reveal Seoul's Mineral Strategy

South Korea is putting 250 billion won, approximately $172 million, behind overseas mining ventures while pursuing two diplomatic efforts that point in different directions: leading a U.S. initiative to reduce dependence on China and arranging closer cooperation with Beijing to keep minerals flowing.

On Wednesday, February 4, Foreign Minister Cho Hyun joined representatives from 54 countries at the U.S. State Department as Seoul formally joined the Forum on Resource Geostrategic Engagement (FORGE). Within 24 hours, South Korea's trade ministry announced plans for a direct government hotline and a joint committee with Chinese authorities to speed up mineral imports and prevent supply disruptions.

As of February 6, 2026, those steps capture the central problem facing South Korean industry. The country needs alternatives to Chinese supplies, but its semiconductor factories, electric vehicle battery producers and other manufacturers still depend heavily on them. New diplomatic partnerships can begin immediately. Mines, refineries and replacement technologies take longer to develop.

The Trump administration wants a preferential trade zone for critical minerals among allies, using price floors and adjustable tariffs to protect suppliers against inexpensive Chinese minerals entering the market. A price floor sets a lower limit on prices, helping producers plan investments even when market prices fall.

Chinese processing facilities handle approximately 90 percent of the world's rare earth supply. Rare earths are a group of 17 elements used in industrial technologies, including the magnets that South Korea wants to produce more securely. For Seoul, joining an alternative supply network while keeping access to China's existing production is an attempt to protect today's factories and prepare different sources for tomorrow.

Why South Korean Factories Are Exposed

South Korea is the world's second largest semiconductor producer and manufactures more than 60 percent of global memory chips. It is also home to leading makers of batteries for electric vehicles. Those strengths depend on materials that the country overwhelmingly obtains abroad.

The Korea Institute of Geoscience and Mineral Resources puts South Korea's net import reliance for all critical minerals at more than 99.7 percent. Critical minerals are materials considered essential to the economy or national security whose supplies may be vulnerable to disruption.

Chinese suppliers provide approximately 80 percent of South Korea's lithium hydroxide and more than 90 percent of its precursor cathode materials and synthetic graphite. Lithium hydroxide is used in battery production. Precursor cathode materials are inputs for making a battery's cathode, while synthetic graphite is another important battery material.

Beijing's restrictions on exports of gallium and germanium in mid-2023 made the danger concrete. Both materials are used in semiconductor manufacturing, and Seoul recognized that interruptions could cripple its technology sector within weeks. A country can have advanced factories and skilled workers yet still struggle to produce goods when a small but essential ingredient becomes unavailable.

South Korea aims to reduce its critical mineral import dependency from 80 percent to 50 percent by 2030. That target sits alongside the institute's broader measure of more than 99.7 percent net import reliance across all critical minerals; the two figures describe different measures of the country's exposure.

Complete separation from China remains impractical in the short term. Seoul's strategy therefore combines continued imports, alternative overseas projects, emergency reserves, recycling and research into materials that could replace some scarce inputs.

A Hotline and Joint Committee With Beijing

South Korea's Ministry of Trade, Industry and Resources plans to establish a government hotline that can respond quickly when Chinese export restrictions or regulatory changes threaten manufacturers. A joint consultative body will address customs procedures, quality standards and long term supply contracts.

Industry Minister Kim Jung-kwan explained the policy during a visit to a rare earth magnet manufacturer in Daegu. He stressed that South Korea's national competitiveness depends on securing industrial resources. The proposed arrangements acknowledge China's central place in mineral processing while seeking more predictable access for Korean buyers.

Seoul intends to designate all 17 rare earth elements as core strategic minerals and introduce new customs classification codes. Those codes would allow authorities to track individual materials more closely and improve forecasts of industrial demand. A dedicated rare earth research and development fund, within existing industrial innovation investment programs, would support substitute materials and processing technologies.

China expanded rare earth export restrictions in October, adding five metals to its controlled list and increasing scrutiny of semiconductor users. Beijing controls approximately 60 percent of global rare earth reserves and processes roughly 90 percent of world supply, giving it considerable power over both access to deposits and the transformation of mined material into usable products.

Chinese Foreign Ministry spokesperson Lin Jian said Beijing opposes countries creating exclusive blocs that disrupt the international economic and trade order. He also said all parties share responsibility for maintaining stable global industrial supply chains.

The October controls followed South Korea's public warning, just weeks earlier, that China's monopoly on rare earths was increasing instability in global supply chains. Seoul responded by choosing deeper engagement rather than retaliation or a faster separation from Chinese suppliers. Its calculation is that open official channels can reduce the risk of a complete supply cutoff while alternatives develop. No launch date was given for the hotline or joint committee.

Seoul Takes a Leading Role in FORGE

South Korea is simultaneously taking a central position in the Western effort to diversify mineral supplies. FORGE succeeds the Minerals Security Partnership (MSP), and Seoul will chair the initiative through June as its first chair from outside the United States.

The MSP was established in June 2022. By September 2024, it was supporting 32 projects worldwide, including 13 in Africa, eight in the Americas and six in the Asia-Pacific region. Those three regional groups account for 27 of the 32 projects, showing how widely the partnership's investments were spread.

POSCO International committed $40 million to the Mahenge graphite project in Tanzania. The investment gives a concrete example of how the partnership seeks to move beyond diplomatic agreements and finance supplies that manufacturers can eventually use.

U.S. Secretary of State Marco Rubio hosted officials from 54 countries at the inaugural Critical Minerals Ministerial, including representatives from Japan, Australia, Canada and India. The effort aims to prevent any single country from using control of essential resources to pressure others.

U.S. Vice President JD Vance outlined plans for a preferential trade zone whose members would receive immediate and durable benefits through consistent pricing despite changes in global markets. The proposal would establish reference prices for critical minerals at each production stage, supported by adjustable tariffs to maintain those prices.

The Trump administration is nevertheless reportedly backing away from guarantees of minimum prices sought by Australia and other countries rich in resources. Those governments want enough certainty to justify investment in new mining capacity. The difference matters: a proposal to stabilize prices still leaves investors needing details about how much protection they would receive.

Cho Hyun said in Washington that Seoul would increase coordination among partners and promote investment in projects to secure supply chains. At the same time, trade officials in Seoul were pursuing closer bilateral ties with Beijing. South Korea's chairmanship therefore requires progress on diversification while preserving the Chinese imports on which its factories currently rely.

More Public Financing for Overseas Mines

South Korea has allocated 250 billion won, approximately $172 million, in state funds to help local companies develop overseas mines. Policy loans for overseas resource development are increasing to $46.2 million in 2026 from $26.6 million in 2025.

The increase is $19.6 million, or approximately 74 percent. The government's financing coverage ratio will also rise from 50 percent to 70 percent, allowing public financing to cover a larger share of supported projects and reducing the risks borne by private investors, including in politically volatile regions.

Australia is the most developed alternative partnership. Under the comprehensive strategic partnership agreed in 2021, Australian mining company Pilbara Minerals and South Korean steelmaker POSCO completed a lithium hydroxide facility in South Korea. It processes spodumene concentrate from Western Australian operations. Spodumene is a mineral from which lithium can be extracted.

The venture links Australian mining with processing in South Korea, creating a supply chain that bypasses Chinese processing facilities. Wesfarmers Chemicals also signed an agreement to supply LG Energy Solution with up to 85,000 tonnes of lithium concentrate.

Australian Strategic Materials secured its first commercial sale of heavy rare earth metals processed at its Korean Metals Plant in Cheongju. Together, these projects show cooperation spanning mining, refining and advanced manufacturing rather than relying solely on purchases of raw materials.

In October, Australian Prime Minister Anthony Albanese and former U.S. President Donald Trump signed a critical minerals agreement giving the United States access to Australian rare earth minerals in return for investment. The arrangement creates a connection among Australia, the United States and South Korean manufacturers operating within U.S. supply chains.

Southeast Asia and Mongolia Offer Other Routes

South Korea is pursuing rare earth partnerships with Vietnam and Laos as part of a wider effort to spread its sources across several continents. Vietnam holds approximately 18 percent of global rare earth element reserves.

Other Southeast Asian countries hold substantial battery mineral resources. The Philippines accounts for about 5 percent of global nickel reserves, while Indonesia possesses roughly 22 percent. Nickel is another material sought by battery manufacturers.

The region's mineral wealth comes with practical constraints. Limited processing capacity, weak regulation and outdated refining technology hinder investment. Deposits alone cannot supply Korean factories: material must be extracted, processed to the required quality and delivered reliably.

South Korea and the Association of Southeast Asian Nations (ASEAN) launched a $5.6 million critical minerals management project in July 2024. Programs to build skills and institutional capacity are planned through 2028, giving the partnership a defined period for improving the conditions needed for mineral development.

Mongolia offers another potential route, approximately 2,000 kilometers from Seoul. It has substantial mineral wealth but needs development assistance to improve its ability to extract resources. South Korea provided official development assistance averaging $53 million annually between 2018 and 2024 and established a Rare Metals Cooperation Committee in November 2023.

Seoul appears to expect that development assistance will encourage Mongolia to export goods made from extracted materials to South Korea. Geography limits that option, however. Mongolia is landlocked between China and Russia, and all exports must pass through one of those countries, leaving shipments exposed to political pressure along their transit routes.

Emergency Reserves and a Faster Response

South Korea's Special Act on National Resources Security, which entered into effect in February, introduced an early warning system, required stockpiling of key resources and gave the government emergency powers. During a crisis, authorities can use measures including price controls and supply allocation.

Supply allocation means directing limited stocks to users according to emergency priorities. Such powers are intended to help manage a shortage rather than leave every manufacturer competing independently for the same scarce material.

Authorities will designate 33 minerals as critical to economic security. Within that framework, 10 strategic minerals essential to electric vehicles and batteries will receive priority monitoring. The planned designation of all 17 rare earth elements adds a further focus on materials considered essential to national security.

The state run Korea Mine Rehabilitation and Mineral Resources Corporation manages an established stockpile of critical minerals. South Korea is expanding storage capacity and developing a rapid response distribution system intended to deliver material within eight days, much faster than traditional procurement timelines.

Stockpiles provide a buffer against sudden export restrictions or geopolitical disruptions. Japan's international resource strategy, adopted in March 2020, is part of the broader Asian move to prepare reserves and protect access to industrial materials.

South Korea lacks the domestic mineral resources needed for the degree of self sufficiency sought through some U.S. measures. Washington has established Project Vault, a strategic minerals stockpile worth $12 billion, funded by $2 billion in private capital and a $10 billion loan from the U.S. Export-Import Bank. Seoul's expanded reserves and distribution system represent the practical insulation its strategy seeks within its geographic and geological constraints.

Recycling and Substitutes Reduce Future Demand

South Korea aims to increase the share of critical minerals obtained from recycled materials from 2 percent to more than 20 percent by 2030. Recycling recovers useful materials from products and industrial waste so that they can return to manufacturing rather than requiring a new supply from a mine.

South Korea is one of three economies, alongside China and the European Union, with a comprehensive long term roadmap for critical mineral recycling. Annual revenue in the global battery recycling industry is forecast to exceed $95 billion by 2040.

The International Energy Agency estimates that expanding recycling could reduce the need for primary mineral production by 25 to 40 percent by 2050 and save $600 billion to $800 billion in mining investment. Primary production means obtaining minerals from newly extracted material rather than recovering them from products already made.

Seoul is also prioritizing substitutes for rare earths in semiconductor manufacturing and improved recycling technologies. Regulatory reforms and subsidies for new facilities are intended to support that work, alongside the planned rare earth research fund.

These measures address a different part of the supply problem. Overseas mines change where minerals come from; recycling and substitutes reduce how much newly mined material manufacturers need. Similar strategies in the United States and Japan create opportunities for cooperation among the three countries on solutions that do not depend on discovering new deposits.

The Dates Behind the Strategy

South Korea's current decisions build on several years of mineral diplomacy, investment and responses to Chinese controls. The main developments show why Seoul is pursuing immediate supply protection and longer term alternatives at the same time.

• March 2020: Japan adopted its international resource strategy, part of the wider regional effort to protect supplies.
• 2021: Australia and South Korea established their comprehensive strategic partnership.
• June 2022: The Minerals Security Partnership was established.
• Mid-2023: China restricted exports of gallium and germanium, exposing risks for South Korean semiconductor production.
• November 2023: South Korea established a Rare Metals Cooperation Committee with Mongolia.
• July 2024: South Korea and ASEAN launched their $5.6 million critical minerals management project.
• September 2024: The MSP was supporting 32 projects worldwide.
• October 2025: China expanded rare earth export restrictions, while Australia and the United States signed a critical minerals agreement.
• February 4, 2026: Cho Hyun participated in the Washington ministerial as Seoul joined FORGE.
• February 5, 2026: South Korea announced plans for a mineral supply hotline and joint committee with China.
• June 2026: South Korea's chairmanship of FORGE runs through this month.
• 2028 and 2030: The ASEAN capacity programs extend through 2028, while Seoul's mineral dependency and recycling targets are set for 2030.

June is the immediate diplomatic milestone. South Korea must use its chairmanship to advance investment and coordination while keeping essential imports available to its manufacturers.

Cooperation Has Commercial and Political Limits

The RAND Corporation's analysis of cooperation among South Korea, Japan and the United States identifies options including joint stockpiles, mineral swap agreements and pooled funding for foreign mining projects. A swap agreement could allow partners to exchange materials when one faces a shortage.

South Korean and Japanese companies compete in batteries and semiconductors, which can complicate deeper cooperation. Historical divisions also make closer economic integration more difficult. Shared security interests therefore sit alongside commercial rivalry and political sensitivities.

China's October expansion of controls demonstrated the danger of depending too heavily on one supplier and reflected calibrated pressure rather than a complete cutoff. Seoul is trying to reduce the risk of the most damaging disruption by maintaining diplomatic and commercial channels while leading the Western diversification effort.

Washington and Beijing each have reasons to question Seoul's commitment when it works with the other. South Korea's response is to keep stable mineral supplies at the center of its decisions, rather than treat alliance membership as a substitute for access to materials.

The coming months will test whether Seoul can turn its FORGE chairmanship into tangible progress without disrupting the imports sustaining its semiconductor and battery industries. The 17 rare earth elements slated for closer security monitoring identify supplies whose disruption could cause immediate economic damage. Success would offer a model for countries managing resource security amid strategic competition; failure would expose the costs of trying to maintain room between rival powers when mineral supplies become instruments of pressure.

The Essentials

• South Korea joined FORGE on February 4, then announced plans for a mineral supply hotline and joint committee with China within 24 hours.
• Seoul will chair the U.S. initiative through June while pursuing continued Chinese imports.
• China accounts for approximately 90 percent of rare earth processing, and South Korea relies heavily on Chinese battery materials.
• South Korea is allocating 250 billion won, approximately $172 million, to support overseas mining ventures.
• Australia, Vietnam, Laos and Mongolia are part of Seoul's effort to develop alternative supplies.
• Seoul plans closer monitoring of all 17 rare earth elements, larger stockpiles and distribution within eight days during supply shocks.
• South Korea targets a reduction in critical mineral import dependency from 80 percent to 50 percent by 2030 and an increase in recycled supplies from 2 percent to more than 20 percent.