- Rare earths are essential minerals for the production of chips, weapons, and electric vehicle batteries, becoming a focal point of US-China tensions as China dominates the global supply and uses this advantage as a geopolitical tool.
- South Korea is shifting away from Chinese suppliers following recent rare earth shortages, increasing imports from Vietnam, Australia, and Europe to diversify.
- At the Korea-Vietnam summit on August 11, the two countries agreed to combine Vietnam’s abundant rare earth resources with South Korea’s technology, through the Korea-Vietnam Strategic Mineral Supply Chain Center to be established in 2025.
- China imposed export restrictions on seven rare earth elements and magnets used in defense, energy, and automobiles from April, causing the price of Dysprosium (of which China supplies 99.8%) to triple.
- In 2023, South Korea depended on China for 95.1% of its rare earth metal imports and 84.3% of its rare earth compound imports.
- LS Cable & System is developing infrastructure for mining and refining rare earths in Vietnam to supply Korean automakers, but requires a mining partner for implementation.
- Posco and its affiliates also met with the Vietnamese delegation but have not announced details.
- Samsung stated it has diversified its rare earth supply from multiple countries to avoid dependence on a single source and increase its negotiating power.
- SK hynix also confirmed its low demand for rare earths and has diversified its supply, but welcomes national-level support to reduce supply chain risks.
- The experience of supply chain disruptions from the Covid-19 pandemic and Japan’s previous export restrictions have prompted South Korean corporations to proactively expand their import networks for strategic minerals.
📌 Vietnam has become a crucial partner in supplying rare earths to South Korea, especially after China’s export restrictions caused the price of Dysprosium to triple. South Korea currently imports 95.1% of its rare earth metals from China but is expanding cooperation in mining and processing with Vietnam, in parallel with the diversification strategies of Samsung, SK hynix, and other major corporations.
