The supply chain war over critical minerals is intensifying. Without stable procurement of critical minerals, victory in the future energy supremacy war is impossible. This is why the U.S.-China hegemonic rivalry is escalating beyond technological competition into a race for mineral resources. For South Korea, which suffers from an acute shortage of natural resources, securing key minerals is the critical key determining national competitiveness. In an interview with Seoul Economic Daily on the 20th, Park Jun-hyuk, a senior researcher at the Korea Institute of Geoscience and Mineral Resources (KIGAM), said, "An economic war without securing minerals and resources is destined to be lost," adding, "Bold tax benefits and financial support must be provided to companies that diversify mineral and resource supply chains concentrated in specific countries and regions." Park emphasized, "Competitiveness cannot be secured through fragmented responses that leave mineral supply chain construction to individual companies," stressing that "the government must quickly establish a control tower spanning all ministries and create an organization that consistently formulates and executes mineral policies currently scattered across individual ministries."
- What is the backdrop to the global mineral war?
△It is the result of the convergence of advanced industry fostering, energy transition, and the competition for defense initiative. Since 2020, with decarbonization policies and the spread of electrification, the industrial ecosystem centered on oil and natural gas has been rapidly reorganizing around artificial intelligence (AI), electric vehicles, and renewable energy. This is why demand for specific minerals such as rare earths, lithium, nickel, cobalt, and manganese has surged. However, due to geological limitations and delayed investment, supply has not kept up with demand, triggering competition for resources. Combined with U.S.-China trade tensions and supply chain blocization, minerals have shifted in character from mere raw materials to "strategic assets." In the past, one could simply purchase them on the market, but now the structure is such that if one fails to secure them within alliances and camps, the industry itself wavers. Particularly as they are directly linked to advanced future industries such as semiconductors, batteries, and defense, mineral resources are serving as the vanguard in the technological supremacy war.
- Why are minerals so important in advanced industries such as semiconductors and batteries?
△Advanced industries without minerals are unimaginable. Semiconductors cannot be manufactured without dozens of minerals, including not only silicon but also hydrogen fluoride and tungsten. Electric vehicles, whose core is the battery, use more than five times as many minerals as internal combustion engine vehicles. In particular, rare earths are essential for core components such as motors, sensors, and LiDAR. The problem is that these minerals are concentrated in specific countries and have virtually no substitutes. Even if partial substitution is possible through technological innovation, complete substitution in a short period is practically impossible. This is why minerals are not mere input materials but "chokepoint resources" that determine industrial competitiveness. In the era of AI and digital transformation, minerals carry strategic significance greater than oil, and securing them has become a key factor determining the very survival of industries.
- The U.S.-Iran war has also brought renewed attention to mineral resources in the Middle East.
△Traditionally, the Middle East has been an energy hub centered on oil and gas, but recently it has come to occupy an important position in mineral supply chains as well. In particular, aluminum and sulfur are representative resources produced on a large scale on the basis of the Middle East's cheap energy. Cheap electricity is essential for aluminum production, which consumes a lot of energy, and the Middle East, armed with low production costs, accounts for 8% of global smelting capacity and 23% of aluminum exports excluding China. South Korea imports 33% of its aluminum alloy ingots from the Middle East, including Qatar. Sulfur, produced during the oil refining process, is also used as a raw material for sulfuric acid, which is essential for nickel and copper production. The Middle East accounts for 24% of global sulfur supply. A prolonged Middle East crisis will have an enormous impact beyond rising oil prices, affecting overall metal production.
- China's mineral hegemony strategy is no ordinary matter.
△China's strength lies not only in the scale of its mineral reserves but also in its outstanding processing and refining capabilities. In mineral supply chains, processing and refining are more important than extraction, and China has secured overwhelming competitiveness and a superior position at this stage. In the case of rare earths, the proportion of refining is much higher than that of extraction, and China virtually monopolizes heavy rare earths such as dysprosium and terbium. This was possible thanks to decades of investment, workforce development, and eased environmental regulations. Ultimately, Western countries were pushed out in price competitiveness, their related industries collapsed, and they have now fallen into a situation where supply chains do not function without going through China. The problem is that this structure cannot be replaced in a short period. The technology itself is not complex, but it requires large-scale facilities and accumulated experience, making it too difficult for latecomers in minerals to catch up. Countries that have handed China the "leash" of their mineral supply chains now face risks that must be endured not only economically but also in terms of security.
- Why is China's weaponization of minerals so frightening?
△A representative example is when China restricted rare earth exports during the 2010 dispute with Japan over the Senkaku Islands (known as Diaoyu in China). It demonstrated that mineral resources can serve as a powerful diplomatic tool. Recently, sophisticated control has been exercised through licensing systems rather than outright bans. By delaying or restricting export licenses for specific companies or countries, virtual control effects are produced. In this process, China can accumulate information on demanding countries and companies to identify vulnerable points in supply chains. If U.S.-China tensions and supply chain fragmentation intensify in the future, the possibility of selective control targeting specific countries or companies cannot be ruled out. This is why South Korea must be on high alert to China's mineral weaponization and prepare thoroughly in advance.
- What are the response strategies of other countries against China?
△The strategy of major countries can be summarized as "building de-China supply chains." The U.S. is reorganizing mineral supply chains through multilateral cooperation centered on allies and is introducing subsidies and minimum price guarantee systems to expand domestic production. The European Union (EU) also set targets through the Critical Raw Materials Act (CRMA), which took effect in 2024, to raise domestic extraction to 10%, processing to 40%, and recycling to 25% by 2030, while reducing dependence on specific countries to below 65%. Japan, since its past rare earth conflict with China, has accelerated overseas asset acquisition and long-term purchase contracts through cooperation between the government and general trading companies. What South Korea should pay close attention to is that governments are actively intervening to compensate for market failures. Securing minerals is difficult to resolve through the efforts of private companies alone. We must take note of how major countries recognize minerals not as mere market goods but as national strategic assets and are mobilizing all policy instruments.
- Then what strategy should South Korea, a mineral-poor country, adopt?
△Given our shortage of mineral resources, we must stake everything on building de-China supply chains and design a more sophisticated strategy. It is necessary to prepare an overseas resource policy centered on demanding companies, inducing firms in advanced fields such as semiconductors and batteries to directly invest in mines or refining facilities. The government should back this up with policy financing and tax support, and make efforts to expand strategic reserves to respond to short-term supply shocks. To reduce dependence on specific countries, it is also worth reviewing ways to diversify supply sources and actively utilize international cooperation networks. A meticulous strategy that breaks away from the existing approach of simply buying resources and internalizes part of the supply chain is needed.
- The Lee Myung-bak administration's resource diplomacy was branded as an accumulated evil.
△If past resource diplomacy placed emphasis on securing minerals, the future must shift toward expanding supply chains. What matters now is not simply acquiring mining stakes but strategic investments connected to domestic industries. In particular, the structure must change to one in which demanding companies participate. It is desirable for the government to focus on financial and tax support and risk sharing roles rather than direct investment. In addition, it is important to strengthen relationships with resource-rich countries by utilizing official development assistance (ODA) and development finance, and to build a foundation for long-term cooperation.
- A shift in perception by the government and the National Assembly is also important.
△To survive in the global mineral supply chain competition, an integrated national strategy is required rather than fragmented responses. The most urgent task is
