The government will expand this year's overseas resource development loan budget to 67.5 billion won, about 1.7 times last year's level, and raise the loan support ratio from 50% to 70%. As global competition to secure resources intensifies, the aim is to push in earnest to stabilize supply chains for critical minerals, focusing on rare earths.
The Ministry of Trade, Industry and Resources on Feb. 5 announced a comprehensive plan for the rare earths supply chain. The plan is an all-encompassing response strategy that covers the entire rare earths supply chain, from mine development to separation and refining to product manufacturing, and it is the first policy of the Ministry of Trade and Industry (MOTI)'s Office of Industrial Resource Security, launched in Dec. last year.
First, the government will designate all 17 types of rare earths as critical minerals and create and subdivide export-import codes (HSK codes) to manage supply and demand trends more precisely. Through this, it plans to detect short-term supply instability early and enhance response capabilities by using trade cooperation channels.
It will also strengthen project-centered resource diplomacy to diversify sources of critical minerals. It will boost the effectiveness of policy finance as well. The overseas resource development loan budget will increase from 39 billion won last year to 67.5 billion won this year, and the loan support ratio will be raised from the current 50% to as high as 70%.
To localize rare earths production, the government will support investment in domestic production facilities, rationalize regulations, and work to energize the recycling ecosystem. It will prepare a research and development (R&D) roadmap that includes rare earths substitution, reduction, and recycling, and will create a dedicated rare earths R&D fund within the Industrial Technology Innovation Fund.
Minister Kim Jung-kwan of the Ministry of Trade and Industry (MOTI) said, "As a consuming country that imports most of its resources, our country faces many difficulties in supply chain management," adding, "We will focus policy capabilities on building the foundation across the entire rare earths supply chain."