Korea Allows State Firms to Invest in Overseas Mineral Projects After 10-Year Ban

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an 'AI-based customized news recommendation and summary service' developed with support from the Korea Press Foundation. It selects and provides six customized news items for each reader type.

1. State Firms Allowed to Invest in Overseas Mineral Development After 10 Years

Key Summary: The government is resuming direct investment by state-run enterprises in overseas resource development for the first time in 10 years, after such investments were effectively banned since the Park Geun-hye administration in 2016. The Korea Mine Rehabilitation and Mineral Resources Corporation Act will be revised within the year to allow KOMIR to explore, develop, and invest in overseas resources, with statutory capital raised from the current 3 trillion won to secure funding for large-scale project participation. The government is also reviewing participation in U.S. rare earth and permanent magnet production facility projects. For private companies, special loan programs for overseas resource development will expand 73.1% from 39 billion won last year to 67.5 billion won this year, with the loan ratio raised from 50% to 70%. Debt forgiveness rates for exploration failures will increase from 80% to 90%. The investment recovery period for the Supply Chain Fund will double from 10 to 20 years, expanding opportunities for startups and mid-sized companies to participate in critical mineral acquisition projects.

2. Government to Forgive 90% of Debt Even for Failed Resource Exploration; All 17 Rare Earth Elements Under Government Supply Management

Key Summary: As China has imposed six export controls on critical minerals over the past three years, increasing supply chain instability, the government has announced comprehensive rare earth supply chain measures. The critical minerals designated under the National Resource Security Special Act will expand from the current seven types to all 17 rare earth elements, with related domestic and overseas infrastructure and technology industries eligible for government support once designated as statutory critical minerals. While new overseas resource development projects fell to just seven in 2024—one-tenth of the 71 projects in 2008—the government is easing the Supply Chain Fund's put option conditions from principal and returns to principal only, and actively supporting rare earth-related overseas resource development through a 250 billion won Critical Mineral and Energy Supply Chain Stabilization Fund. Additionally, from 2027, budgets of more than 10 billion won per project will be allocated to three major R&D areas including rare earth substitution, reduction, and recycling to pursue technological self-reliance.

3. SK Siltron to Begin New Plant Operations in July; 500 Billion Won Support from Growth Fund

Key Summary: Semiconductor wafer manufacturer SK Siltron is pursuing funding of more than 500 billion won through the National Growth Fund, utilizing low-interest policy financing. The low-interest loan program within the National Growth Fund offers rates at government bond levels of 2.7% annually, more than 1 percentage point lower than commercial bank loan rates (4.08% for large corporations), enabling savings of more than 5 billion won annually in financing costs. SK Siltron is investing a total of 2.3 trillion won to expand 12-inch silicon wafer manufacturing facilities at the Gumi National Industrial Complex Zone 3, with approximately 1 trillion won in additional investment still needed after excluding costs already disbursed. With policy financing support proceeding sequentially, the company plans to begin full-scale operations at the new plant from July to significantly increase production volume. According to SEMI, global silicon wafer shipments are projected to increase more than 20% from 12.824 billion square inches last year to 15.485 billion square inches in 2028.

4. hy Establishes Joint Venture with Hive; K-Food Leverages Global IP

Key Summary: Korean food companies are strengthening export competitiveness by leveraging K-content with global recognition, expanding business structures from simple marketing collaborations to joint venture establishment. hy recently established a joint venture with Hive through a business combination following stock acquisition, having applied BTS licensing intellectual property to its coffee products since 2018. After Dongwon F&B signed BTS member Jin as its representative model, exports of major products including Dongwon Tuna, tteokbokki, seaweed, kimchi, convenience foods, pet food, and beverages increased approximately 20% year-on-year in Q3 last year. Nongshim collaborated with popular Netflix animation 'K-Pop Demon Hunters' and achieved approximately 15% growth in overseas subsidiary sales in Q3 last year, with sales growth reaching 30% particularly in Japan. Based on this, the company has raised its overseas sales ratio to the 40% level.

5. No People, No Dust: Electric Vehicle Parts Smart Factory

Key Summary: Daedong Gear, which produces electric vehicle and agricultural machinery parts, is implementing smart factory capabilities through full automation and cleanroom construction, pursuing a goal of raising electric vehicle parts sales ratio from the current 50% to 70%. Daedong Gear has fully automated 42 processing lines at its Sacheon plant and preemptively established a cleanroom for 'rotor shaft' processes inside electric vehicle motors. The company also became the first in the agricultural machinery industry to introduce a camera-based 'vision inspection system,' reducing defect rates from the previous 10% level to 2-3%. Centered on the cleanroom with annual production capacity of 300,000 units, the company plans to begin full-scale mass production of parts ordered by global electric vehicle manufacturers from Q3 this year. Daedong Gear's next goal is to expand its business into precision reducers and robot joint actuators—core robot components—based on 53 years of accumulated gear processing know-how.

6. Government Holds Meeting on Agricultural and Fishery Product Distribution Structure Innovation

Key Summary: The government is working with the private sector to improve distribution structures to reduce agricultural and fishery product price volatility, announcing plans to streamline complex distribution stages to lower consumer burden while stabilizing farm and fishing household income. The Ministry of Economy and Finance, Ministry of Agriculture, Food and Rural Affairs, and Ministry of Oceans and Fisheries held a 'Field Meeting for Agricultural and Fishery Product Distribution Structure Innovation' at the aT Center in Yangjae, Seoul on January 5, broadly discussing online wholesale market activation, field difficulties faced by private distributors, supply-demand prediction system advancement, and public-private collaboration measures for discovering new distribution channels. The government is supporting construction of Smart Agricultural Product Centers (APC) and Fishery Product Centers (FPC) with a goal of processing half of all wholesale distribution volume through online wholesale markets by 2030, with centers enabling direct delivery distribution channels from production sites to consumers.