‘ Rare Earths and Critical Minerals War: “Materials More Important Than Oil” … Key Raw Materials for the AI Era

• Semiconductors, batteries, advanced electronics, cutting-edge weapons, etc. … Critical mineral supply chains are vital
• Most critical minerals sourced from China … Western nations like the US and Europe review supply chain management
• South Korea designates 17 types of rare earths as critical minerals … Reducing reliance on Chinese imports, strengthening cooperation with the US, Japan, Australia, Malaysia, etc.

“If wars were fought over oil resources in the 20th century,
Wars could be fought over critical mineral resources in the 21st century.“

“From the South Pacific to Africa … The U.S. vs. China competition to secure critical minerals”

The Wall Street Journal (WSJ) reported on the fierce competition between the US and China over the rights to develop critical mineral deposits in the Cook Islands in the South Pacific. Both nations are approaching the islands with promises of massive investment and support, while Cook Islands politicians and residents are struggling to drive up their bargaining power between the two countries.
The Economist reported on the fierce competition between the US and China over key mineral rights in Central Africa. The US reportedly promised infrastructure investment, while China proposed debt relief measures for debts incurred through projects like the Belt and Road Initiative.
Thus, the two nations are engaged in fierce competition worldwide over mining rights and business rights for key minerals.

Critical minerals essential for both the economy and security… “China dominates mining, refining, and processing technologies”

South Korea has Korea Zinc? … “Korea Zinc × U.S. Department of Defense to build smelter through joint venture”

China dominates nearly all rare earth and critical mineral supply chains. It holds overwhelming technological superiority across all sectors, including mining, refining, and processing.
Rare earths and critical minerals require not only mining but also refining, processing, and smelting technologies. Given the difficulty in acquiring these technologies, companies possessing mineral smelting capabilities could see their value rise significantly in the future.

Among Korean companies possessing mineral smelting technology, Korea Zinc stands out as a representative example.

Korea Zinc produces zinc, lead, gold, silver, copper, and strategic materials like antimony, bismuth, and indium. It is recognized as the world’s largest single smelter.
Korea Zinc announced plans to establish a joint venture, Crucible JV, with the U.S. Department of Defense and to construct a large-scale smelter in Tennessee, USA. Through this, the U.S. anticipates stabilizing its manufacturing supply chain by leveraging Korea Zinc’s smelting technology and its production of critical and rare minerals.
Representative ETFs that include Korea Zinc stock are the KODEX Steel ETF and the TIGER 200 Steel Materials ETF.

‘Resource weaponization’ to intensify… ‘Export controls
Is South Korea prepared?

China has already left open the possibility of export controls on rare earths and critical minerals. This has caused significant concern among Western nations, including Korea, the U.S., and Japan. Korea has stated it will increase the number of critical and strategic minerals and respond to supply chain threats.

Particularly, as it has been confirmed that Chinese materials, components, and equipment constitute a significant portion of U.S.-manufactured stealth fighters and advanced radars, efforts to stabilize supply chains are expected to continue. A prime example is Korea Zinc establishing a joint venture with the U.S. Department of Defense to build a smelter within the United States.

Amidst this, President Lee Jae-myung has announced his schedule for a state visit to China.
This state visit to China appears to have addressed supply chains, particularly those for critical strategic minerals, while also covering bilateral security issues.

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