Critical Minerals Supply Chain Requires Bold Corporate Support

The United States has decided to introduce a minimum price system for critical minerals to block China's low-price offensive. Jacob Helberg, U.S. Under Secretary of State for Economic Growth, Energy, and the Environment, said at the National Technology Leadership Summit held in West Palm Beach, Florida on the 4th of this month that "the U.S. is discussing a price floor system with relevant government agencies to reduce dependence on China for critical minerals essential to national security." The Donald Trump administration proposed introducing price floors and active participation by private equity funds at a critical minerals ministerial meeting hosted by the State Department on the 14th, inviting 55 countries.

With China having secured a virtual monopoly in refining and processing rare earth elements and battery-related critical minerals, the U.S. price floor system is interpreted as a collective defense mechanism against China's low-price offensive, going beyond simple industrial support. The U.S. has begun in earnest to reduce its dependence on China by strengthening cooperation with Australia and Japan to secure problematic rare earth and critical mineral supply chains. Late last year, the U.S. and Australia first launched a rare earth framework for critical minerals, followed by Japan. The three countries view rare earth elements not as simple resources but as strategic assets for national security. As they are used across core industries including semiconductors, batteries, electric vehicles, and advanced weapons, supply chain diversification has emerged as a matter of survival given China's virtual monopoly over production and refining.

Above all, supply chain stability is an urgent task for Korea, which centers on materials, parts, and equipment manufacturing following steel and shipbuilding. As China has played the rare earth and critical mineral control card as a counterattack in the U.S.-China technology competition, Korea must respond well. Resource weaponization—using critical minerals to pressure rival countries in disputes or technology battles among major nations—has now become routine. The only ways out are overseas resource development, supply chain diversification, alternative material development, and recycling.

The Korean government's critical mineral supply chain policy focuses on fostering the resource industry through resource development and supply chain diversification, with the private sector taking the lead and public corporations providing support. Electric vehicle battery companies and secondary battery material companies are devising countermeasures to reduce dependence on specific countries for battery raw materials, such as pursuing resource development in third countries outside China and signing long-term supply contracts with global resource development companies. However, budget increases to enhance the effectiveness of government policies related to overseas resource development and strengthening the role of resource public corporations remain insufficient.

Japan's critical mineral supply chain policy, as our competitor, is very systematic. In overseas mineral acquisition, since the early to mid-2000s, Japan has mobilized public institutions and policy financial institutions such as the Japan Organization for Metals and Energy Security (JOGMEC) and the Japan Bank for International Cooperation (JBIC) to establish a risk-sharing system with private companies for overseas mineral resource development and devised appropriate responses to resource crises. In March last year, JOGMEC jointly invested up to 110 million euros (approximately $120 million) with private company Iwatani in a French rare earth refining project.

JOGMEC also acquired development rights to Australia's Mount Weld mine, Vietnam's Dong Pao rare earth mine, and the U.S. Mountain Pass rare earth mine through joint investments with private general trading companies such as Sojitz, Toyota Tsusho, and Mitsubishi Corporation. This played a decisive role in reducing Japan's dependence on China for rare earths from 80-90% to 50-60% over the medium to long term.

In Korea, the Korea Mine Rehabilitation and Mineral Resources Corporation, a resource public corporation, has been unable to conduct overseas resource development for over 10 years. The Moon Jae-in administration legally blocked resource development. However, private companies are achieving results through their own business activities. A representative case is Ecopro, which is accelerating the establishment of an all-solid-state battery value chain. The holding company of Ecopro Group and affiliates including Ecopro Innovation have invested approximately 700 billion won since 2022 in four nickel smelters at the Morowali Industrial Complex in Indonesia, earning investment profits of approximately 250 billion won last year.

In particular, Ecopro is pursuing a portfolio of next-generation materials for all-solid-state batteries to reduce dependence on specific metals. Ecopro BM and Ecopro Materials are developing ternary cathode materials for all-solid-state batteries, while Ecopro Innovation is internalizing lithium metal anode materials and lithium sulfide, a core material for solid electrolytes. This can be interpreted as a strategy to diversify the profit structure by enhancing technological capabilities through building a "full value chain" encompassing all materials for all-solid-state batteries, going beyond being a simple cathode material manufacturer. All-solid-state batteries use solid electrolytes instead of liquid electrolytes to conduct lithium ions, aiming for high energy density and stability. Above all, solid electrolytes do not burn, lowering fire risk.

As U.S.-China technology hegemony competition intensifies, critical minerals will become the Achilles' heel of our manufacturing industry. We must recognize that securing critical mineral supply chains is directly linked to the existential survival of our industry. The government must firmly establish a national-level resource security strategy and provide more substantial support to companies with technology and global business networks from a practical and pragmatic perspective.