(EDITORIAL from Korea Times on May 31)

Korea faces a significant challenge in securing a stable supply of core minerals essential for the Fourth Industrial Revolution. According to an analysis by Standard and Poor's (S andP), Korea owned just 36 key mineral mines in 2022. This number pales in comparison to China and the United States, which have 1,992 and 1,976 mines respectively, and even falls short of Japan's 134 mines. The seven key minerals are copper, zinc, lead, iron ore, nickel, lithium and cobalt, the Federation of Korean Industries (FKI) said quoting S andP data. These minerals have become vital for emerging industrial sectors, including artificial intelligence (AI), secondary batteries for electric vehicles, and energy storage systems (ESS) for solar power generation. What matters most is Korea's heavy reliance on other nations, particularly China, for imports. The nation's self-sufficiency in production is less than one percent, with Korean firms' share of total global production standing at 0.2 percent for copper, 0 percent for zi nc, and 0.4 percent for iron ore. The proportion of nickel and cobalt was 1 percent each, while lithium also stood at 0 percent. Given this reality, the nation has had no choice but to import these crucial minerals. Furthermore, due to less diversified import channels, it has been increasingly vulnerable to the risk of global supply chains. For starters, the nation imports 87.9 percent of its lithium hydroxide, a key material for secondary batteries. It also purchases 68.2 percent of nickel ammonium from Finland. The weak supply chain for core minerals can be traced back to the so-called "lost decade" in overseas resource exploration. The previous Lee Myung-bak administration (2008~2013) proactively pursued the development of overseas mineral mine projects, initiated by what was called Korea Resources Corporation (KORES) at the time. Despite the temporarily successful exploration of some mines, the state projects largely failed, resulting in huge financial losses, due to inexperience coupled with the global financial crisis. The Park Geun-hye administration was notably passive, while the Moon Jae-in government took a more drastic approach by discarding various overseas resource projects and dismantling KORES, labeling the sector as "accumulated evil." The Moon administration sold off critical assets, including a coal mine in Australia and a copper mine in Chile, thereby depleting Korea's resource base. In the post-COVID-19 era, global protectionist policies have intensified, increasing the risk of global supply disruptions amid geopolitical tensions, such as the U.S.-China rivalry and the Russia-Ukraine war. China's strategic use of its core material resources as a geopolitical tool underpins the critical link between securing key minerals and national security and competitiveness. Due to the nation's lack of natural resources, Korean companies have no choice but to import these essential minerals. As a result, Korea will face an increasing need to navigate the complexities of the forthcoming Fourth Industria l Revolution and emerge stronger in related industries. The government and enterprises alike should double down on efforts to secure safe global supply chains and recover from the lost years. Additionally, projects to develop and expand resources in overseas territories will be necessary for Korea to remain globally competitive. Increased financial assistance from the government will enable enterprises to navigate the complex and competitive landscape of global mineral procurement. Diverse policies should boost investments in overseas mining projects and promote research and development in mineral extraction and processing technologies. Securing a stable supply of core minerals is not just an economic necessity but a strategic imperative for Korea. By diversifying import channels for the key minerals and increasing state support, Korea can fortify its industrial base, bolster its national security and position itself as a leader in the industries of the future. Source: Yonhap News Agency