The government will expand financial and tax support to boost the re-resourcing of critical minerals. It will also push to ease regulations by designating key feedstocks such as rare earths as "circulating resources."
Koo Yun-cheol, Deputy Prime Minister and Minister of the Ministry of Economy and Finance, on the 31st convened the 6th Supply Chain Stabilization Committee and announced a "plan to promote the re-resourcing of critical minerals."
Re-resourcing of critical minerals refers to producing critical minerals essential to advanced industries—such as nickel, cobalt, and lithium—by reprocessing feedstocks that can be recycled as resources, including waste batteries, waste printed circuit boards (PCB), and spent catalysts. It is interpreted as a strategy to stabilize supply chains for critical minerals that depend on specific countries such as China and to secure future competitiveness in advanced industries.
The domestic market for critical mineral re-resourcing is projected to grow from 6.7 trillion won last year to 21.1 trillion won by 2040. However, high technological and capital entry barriers make private-sector entry difficult, and most of the industry lacks the capacity for new investment.
With industrial support and regulatory rationalization, the government set a goal of raising the re-resourcing rate for the 10 strategic critical minerals to 20% by 2030.
To that end, it will first expand tax support for re-resourcing. The government currently supports technologies essential to supply chain stabilization—such as production technologies for heavy rare-earth-reduced permanent magnets—by including them as national strategic technologies and new growth original technologies.
In addition, the government plans to pursue tariff cuts through quota tariffs in consideration of tariff rates in major countries. Japan, the United States, and the European Union (EU) apply a 0% tariff rate to major re-resourcing feedstocks.
It will also form a public-private "critical minerals investment council" to identify promising re-resourcing projects and promote measures to support direct investment, loans, and guarantees using the Supply Chain Stabilization Fund. Next year, it plans to inject a 3.7 billion won budget to subsidize facilities and equipment.
It will also push to build an industrial ecosystem for re-resourcing. It will support corporations in conducting demonstrations and business in critical mineral re-resourcing at clusters such as the Pohang battery resource-circulation cluster and the Gumi semiconductor resource-circulation cluster. For companies moving into the clusters, it will provide a package of support for re-resourcing facilities and equipment, raw material and product certification and analysis, and demonstration and commercialization.
It will also rationalize regulations on the distribution of re-resourcing feedstocks. For major re-resourcing feedstocks, it will review hazards, economic feasibility, and the risk of abandonment, and consider designating them as "circulating resources" if they meet certain standards. If designated as circulating resources instead of waste, many waste-related regulations on transport and storage will be substantially eased.
By revising the enforcement decree of the Act on the Transboundary Movement of Wastes, it will ease the import guarantee obligation for waste resources designated as circulating resources and consider expanding the scope of import guarantee deposit exemptions—currently including scrap metal and waste paper—to re-resourcing feedstocks designated as circulating resources.
Marking the first anniversary of the launch of the Supply Chain Stabilization Fund that day, the government also announced outcomes and improvement plans. It said it has provided 6.5 trillion won in support from the fund's establishment in Sep. last year through Sep. this year. Going forward, it will activate direct and indirect investment and increase support for small and midsize enterprises and mid-cap companies.
It plans to make direct and indirect investments of 100 billion won annually in high-risk areas such as overseas resource development and transport infrastructure, and to create a 250 billion won fund to stabilize critical mineral and energy supply chains through joint investments by the supply chain fund and the public and private sectors.
To support small and midsize enterprises and mid-cap companies with low credit lines, it will also prepare a special loan program that applies separate limits and eased conditions so that funds can be provided even to corporations whose loan limit had been restricted under existing financial evaluation standards.