South Korea is pursuing closer cooperation with China on critical mineral supply chains even as it deepens its participation in a U.S.-led effort to reduce dependence on Beijing for strategically vital resources. Seoul’s trade ministry said on Thursday that it plans to strengthen coordination with Chinese authorities to secure stable supplies of rare earths essential for advanced manufacturing and emerging technologies.
The move highlights South Korea’s balancing act between aligning with U.S. efforts to diversify supply chains and maintaining pragmatic ties with China, the world’s dominant supplier of rare earth minerals.
Background: Competing Pressures on Supply Chains
The announcement comes just days after South Korea joined a U.S.-led trade bloc focused on critical minerals, formed with allies and partners to guard against excessive reliance on China. The bloc, known as the Forum on Resource Geostrategic Engagement (FORGE), aims to prevent any single country from using control over key resources as geopolitical leverage.
China currently dominates global rare earth production and processing, a reality that has long concerned countries heavily dependent on these materials for semiconductors, electric vehicle batteries and high-tech manufacturing.
Engagement with China
Despite joining the U.S.-backed initiative, South Korea’s trade ministry said it would establish a hotline and a joint committee with Chinese authorities to help South Korean firms import Chinese minerals more quickly and reliably. Officials framed the initiative as a practical step to ensure supply stability rather than a shift away from diversification efforts.
South Korea lacks a complete domestic supply chain for rare earths, the ministry said, making continued engagement with China unavoidable in the near term.
Domestic Measures and Diversification Plans
To strengthen resilience, Seoul will designate 17 minerals as critical to national security and step up monitoring and analysis to prevent sudden shortages. The government also plans to cooperate with countries such as the United States, Vietnam and Laos to diversify sourcing.
As part of this strategy, South Korea will allocate 250 billion won (about $172 million) in state funds to support local companies developing overseas mining projects.
Rising Tensions Over Rare Earths
China expanded its controls over rare earths in October, including increased scrutiny of supplies used by semiconductor manufacturers. At the time, South Korea warned that China’s near-monopoly heightened instability in global supply chains.
Washington has since intensified efforts to secure alternative supplies after Beijing last year restricted exports of certain critical minerals, underscoring the strategic importance of these materials in global industrial competition.
South Korea’s Role in FORGE
On Wednesday, South Korea was selected to chair FORGE through June, giving Seoul a central role in coordinating efforts among participating countries. South Korean Foreign Minister Cho Hyun told a meeting in Washington that the country would work to boost coordination among partners and encourage investment in projects aimed at securing critical mineral supply chains.
Analysis: Strategic Hedging in a Fragmenting Global Economy
South Korea’s approach reflects a broader strategy of hedging in an increasingly fragmented global economy. While aligning with U.S.-led initiatives to reduce strategic vulnerabilities, Seoul is unwilling to abruptly loosen its economic ties with China, a key supplier and major trading partner.
Rather than choosing sides outright, South Korea appears intent on managing risk through diversification while keeping diplomatic and commercial channels with Beijing open. This dual-track strategy may help stabilize supplies in the short term, but it also underscores the difficulty mid-sized industrial powers face as critical minerals become central to geopolitical competition between the United States and China.
With information from Reuters.
