The Lee Jae-myung administration has decided to actively pursue overseas resource development—a practice that had been taboo under previous progressive governments—as concerns over critical mineral supply chain instability continue to grow.
According to the Ministry of Trade, Industry and Energy on Monday, China has implemented a total of six export controls on critical minerals over the past three years: three in 2023, one in 2024, and two in 2025. While China's rare earth export controls against the United States were suspended following a surprise meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Gyeongju last October, the reprieve is only for one year. The possibility of the rare earth and tariff war between the U.S. and China reigniting at any time remains significant.
Although defensive measures need to be built quickly before a supply chain crisis erupts, Korea's response to critical mineral risks has been limited to stockpiling only some essential items. Overseas resource development—the most direct way to secure critical minerals—has been on a downward trajectory since the resource diplomacy failures of the Lee Myung-bak administration.
According to the "2024 Overseas Resource Development Report" prepared by the ministry last August, only seven new overseas resource development projects were initiated in 2024. This is one-tenth of the 71 projects launched in 2008 during the Lee Myung-bak administration. Moreover, there were no new projects by public enterprises. After the "Public Institution Function Adjustment in Energy, Environment, and Education Sectors" plan under the Park Geun-hye administration in 2016 effectively ended public sector-led resource development, ongoing projects were liquidated. The number of active projects, which had peaked at 236 in 2011, shrank to 116 in 2024. As of 2024, only 3 of the 14 projects being conducted by the Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) are related to the 10 strategic critical minerals.
In response, the government has decided to expand KOMIR's role. By amending the corporation's enabling law, the government will grant KOMIR comprehensive project management functions. The plan is for KOMIR to take the lead in activating government-to-government cooperation channels and managing projects comprehensively, creating an environment where private companies can confidently engage in overseas resource development.
The government will also actively support private sector overseas resource development. It has expanded the special loan program for overseas resource development by 73.1%, from 39 billion won last year to 67.5 billion won this year. The government also plans to raise the loan ratio from the current 50% to 70%, an increase of 20 percentage points. The debt forgiveness rate for exploration failures will be expanded from 80% to 90%.
The ministry also plans to ease investment support requirements so Korean companies can more easily receive investments from the Supply Chain Fund or the Export-Import Bank of Korea. This includes doubling the Supply Chain Fund's investment recovery period from 10 years to 20 years and easing put option conditions from principal and returns to principal only. The government will also support rare earth-related overseas resource development through a 250 billion won Critical Minerals and Energy Supply Chain Stabilization Fund. A senior government official emphasized, "What's more important than pursuing 100 projects in overseas resource development is creating one success story."
Additionally, the government has decided to reorganize its rare earth supply management system. First, it will expand the critical minerals designated under the National Resource Security Special Act from the current seven rare earth elements—including samarium, dysprosium, scandium, and yttrium—to all 17 rare earth elements. Designation as a statutory critical mineral makes related domestic and international infrastructure industries and technologies eligible for government support. The government also plans to subdivide export-import codes (HS codes), currently broadly classified into cerium group and thorium group, by individual rare earth elements, and establish a comprehensive information system at the Rare Metals Center by 2027. Full life-cycle supply chain analysis, currently limited to neodymium, will be expanded to cover all rare earth elements.
The government simultaneously announced plans to develop the domestic re-resourceization industry to internalize the supply chain domestically. The goal is to extract rare earth elements from spent catalysts and waste batteries for reuse. To this end, the government will invest 3.8 billion won this year to support facility and equipment investments by rare earth re-resourceization companies and raise the re-resourceization rate of the 10 strategic critical minerals to 20% by 2030.
Furthermore, starting in 2027, the government will invest more than 10 billion won per project in three major R&D areas—rare earth substitution, reduction, and recycling—and pursue technological self-reliance in rare earth refining and re-resourceization. "Korea has advanced industries such as semiconductors, electric vehicles, and batteries, but as a consuming country that imports most of its resources, we face many difficulties in supply chain management," said Kim Jung-kwan, Minister of Trade, Industry and Energy. "Our national competitiveness depends on industrial resource security, and the public and private sectors must work closely together on stable rare earth supply chain management."