Introduction

The past decade has witnessed an intensifying scramble for critical minerals as their importance for technological innovation and economic growth is being increasingly recognised. Resource-rich countries with established refining and processing capabilities, such as China, have enjoyed a clear advantage, while resource-poor states have struggled to secure raw materials for their industries. Some have found useful strategies, though.

South Korea and Japan, for example, while mineral-poor, are working around a holistic approach towards the mineral supply chain. To differing degrees, they have developed a more resilient mineral supply chain across the streams, reducing their dependence on China for certain minerals (see Figure 1).^[1]

Figure 1: Imports of Critical Minerals by South Korea and Japan in 2024 (in US$ Thousand) 

Source: Author’s own, using data from Korea Customs Service^[2]

Indeed, mineral security has become a prerequisite for economic security. Both South Korea and Japan have in place an economic security legislative and policy framework that links uninterrupted access to critical minerals to their economic security.

In 2019, Japan created an economic security section within its National Security Secretariat and enacted the Economic Security Promotion Act in 2020.^[3] Other measures, like the Foreign Ministry’s reorganisation and the creation of an Economic Security Division under the Economic Affairs Bureau announced in 2025, emphasise the importance of self-reliance.^[4] For its part, South Korea revamped its National Security Council apparatus, adding a third deputy National Security Advisor position to focus on emerging security issues.^[5]

Both countries have also articulated their economic security vision at the regional level. South Korea’s Indo-Pacific strategy, released in December 2022, emphasised the expansion of “regional economic security networks for stable and resilient supply chain management.”^[6] Similarly, Japan’s 2022 National Security Strategy identifies economic security as a core policy priority.^[7] Additionally, both countries see public-private partnerships as critical to their economic security approach. 

Driving this evolution in the economic security strategies of South Korea and Japan is China’s domination of the critical mineral supply chain. Its control across the supply chain, from mining, refining, and processing to value addition—for many critical minerals, including rare-earths—has become a matter of concern. Today China has the largest market share in nothing less than 33 minerals,^[8] including lithium, gallium, graphite, germanium, antimony, and cobalt.^[9] It also controls the global production of 40 percent of strategic minerals, amounting to more than half of the global output.^[10]

In 2025, China restricted the export of several minerals, including seven rare-earths used in critical sectors and applications, such as semiconductors, batteries, electronics, and defence production. Its decision to leverage control over the supply chain for political purposes has created anxieties among other countries, not only its adversaries, who depend on China for the supply of critical minerals. Most countries have ventured to de-risk, or establish alternative supply chains to offset dependence on China.

Table 1: China’s Restrictions on Critical Minerals Exports

Year/Date	Action	Target Country	Affected Sectors
2010	Restriction on rare-earth elements exports	Japan	Disrupted Japanese businesses
1 August, 20 October, and 21 December 2023	Restriction on export of Gallium and Germanium, graphite products, and rare-earth processing technology	None	Extensively used in semiconductor and electronic manufacturing
3 December 2024	Antimony, Graphite, Diamonds, and other synthetic materials   Gallium, and Germanium	United States	Batteries, semiconductors, diodes, weapons, telecommunications, and solar cells
4 February and 4 April 2025	Export restrictions of rare-earths (dysprosium, scandium, yttrium), and other minerals such as bismuth, indium, tellurium, molybdenum, and tungsten.	United States	EV Batteries, rare-earth magnets, aerospace, semiconductors, missiles, drones, robots
January 2026	Export restrictions on rare-earths and magnets	Japan	Automotive defence and electronics industries

Source: Author’s own, using various sources^[11]

China's strict enforcement of export controls—requiring exporters to submit six sets of documents, including an end-user profile—has made the process cumbersome for importers.^[12] The tracking system adds further scrutiny, making it difficult for countries to import minerals. While the US has been the target of China, now given the close dependencies with the US, even Korea and Japan are not insulated. For instance, China has warned Korea against providing any minerals to the US, and has implemented new export restrictions on Japan in the backdrop of Prime Minister Sanae Takaichi’s remarks on Taiwan.^[13]

Figure 2: Chinese, Korean, and Japanese Presence Across the Mineral Supply Chain

Source: Kim Dongsoo, KIET^[14]

South Korea: De-Risking and Diversification

South Korea’s economic growth is export-driven. It is the world’s second-biggest semiconductor producer and holds 26 percent of the global battery market.^[15] However, imports meet nearly 95 percent of its mineral requirements,^[16] creating structural vulnerabilities that impact sectors such as semiconductors, electronics, and green technologies.

In 2023, the Ministry of Trade, Industry, and Energy (MOTIE) formulated a critical minerals strategy to strengthen supply-chain resilience. The move followed China’s 2022 export restriction on urea,^[17] a diesel fuel additive and a fertiliser, which created severe supply-chain disruptions that alarmed the government. Speaking on the risks from external shocks, Choi Sang-mok, former acting President, stated early last year, “We are very concerned about supply chain risks as global economic uncertainties are high due to the protectionist policies of the new U.S. administration, including the tariff scheme, and China's export controls on critical minerals.”^[18]

South Korea then took proactive steps to reduce its dependence on China. Working with industries and businesses, the government developed a holistic plan to diversify the mineral supply chain across segments. Given imports of US$640 million worth of rare magnets in 2022, South Korea was particularly vulnerable.^[19] A 2025 report by the Korea Institute of International Economic Policy predicts that a rare-earth disruption could cause a 10.8-percent and 24.2-percent reduction in exports of secondary batteries and auto parts.^[20]

MOTIE’s strategy now aims to bolster South Korea’s economic security and establish a comprehensive mineral supply-chain framework (Table 2). The strategy has four pillars: domestication, diversification, stockpiling, and recycling. In 2023, as part of the strategy, South Korea announced it would reduce its dependence on China from 70 percent to 60 percent by 2027, and further to 50 percent by 2030.^[21] Additionally,      33 minerals were identified as ‘vital’; and 10 were called ‘strategic’ items, including lithium, cobalt, graphite, nickel, manganese, and five rare-earth elements.^[22]

Table 2: Initiatives Undertaken by the South Korean Government

Initiatives

Policy Intervention Announced and in the Pipeline

Legislation and Policy Support[23]	● Framework Act on Supply Chain Stabilisation for Economic Security Passed (December 2023), Special Act on National Resource Security (January 2024), Act on Special Measures to Strengthen, Enacted Special Act on the Security of National Resources (February 2024). ● Announced Plan for Enhancing the competitiveness of the Korean Secondary Battery Industry (December 2023). ● Establishment of the Supply Chain Stabilisation Committee,[a] an early warning system based on supply-demand, and KOMIR, in 2021.
Fiscal Incentives[24]	● Policy Funds of 45.8 trillion won, Supply Chain Stabilisation Fund of 10 trillion won, ● Export-Import Bank of Korea supports in the form of 13.3 trillion won, ● 18 trillion won from the Korean Development Bank, and ● Supply Chain Resilience Fund of 5 trillion won (US$3.7 billion).
Overseas Development Support	● Support for equity investment in foreign companies. ● Tax incentives enhancement for overseas mineral investment used in the semiconductor and battery industries. ● 50 percent of the developmental costs by the state, and in case of the project’s failure, the repayment costs are reduced by 80 percent.
Public Stockpiling Integrated Management System	● Diversifying through third-party stockpiling. ● Incentive system to support the inventory management facility, storage fee, system establishment expenses, and stockpiling by the private sector.
Recycling	● Review the tariff on recycled raw material and support measures. ● Goal to recycle 20 percent of the top ten strategic key minerals by 2030.  ● Establish an integrated management database for used batteries. ● Support for private industries through direct investment and loan support.  ● For new policy support, concerning encouraging core mineral recycling infrastructure, the government will operate an inter-ministerial task force, a private experts committee, and a public-private joint forum.
Import Diversification	● Provides funds to fill the price gap for (short-term difference support) for high-risk items from third countries to reduce dependence. ● Emergency procurement fund, and Subsidies and Tax breaks for foreign investments.
Research and Development	● Supply Chain R&D of 25 trillion won for three years. ● Establishing a Private Equity Fund of 1 trillion won
Distribution	● Provide a logistics and shipping fund to increase overseas logistics centres from 6 to 40 by 2032.  ● Public funds will be provided.  ● Encourage taking stakes and operating rights at major ports.

Source: Author’s own, using various sources^[25]

In 2024, the government announced the First Basic Plan for Supply Chain Stabilisation (2025-2027) under the Framework Act on Support for Supply Chain Stabilisation for Economic Security. The Act was passed to prevent and effectively respond to supply chain risks.^[26] Under the plan, the government also created a supply chain stabilisation committee chaired by the finance minister and 25 other experts;^[27] its mandate is to oversee coordination between various public procurement agencies, the Ministry of Foreign Affairs, and the South Korean customs.^[28] In July 2025, the government reviewed the items critical for the country's economic security, including the mineral supply chain.^[29]

Institutionally, the government has introduced fast-tracked decision-making, financial incentives, and structured public-private consultations. In September 2021, it established the Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR)^[30] through the merger of the Miner Reclamation Corporation and the Korea Resources Corporation.^[31] KOMIR supports overseas resource development by providing loans,^[32] equity investment, and guarantees—covering upto 50 percent of the project costs.^[33] Recognising the high-risk nature of the sector, in case of failure, the reimbursement will be reduced by 80 percent.^[34]

Stockpiling 

As part of its strategy, South Korea established an integrated public stockpile management system. The plan focuses on third-party stockpiling and rotating inventory to maintain stockpile levels.^[35] The government's objective is to increase the stockpiling of the vital minerals from 54 days to 100 days and non-ferrous metals from 50 to 60 days.^[36] As part of fiscal incentives, the government announced support of US$3.59 billion for leading companies via tax credits, including project costs associated with research and development projects. Another fund by the Export-Import Bank of Korea, amounting to US$3.79 billion, was announced to support the stockpiling of critical minerals by creating new facilities and businesses.^[37] From 2004 to 2016, Korea stockpiled 10 different minerals, including chrome, for 64.5 days on average.^[38] In 2023, KOMIR had a stockpile of 80,043 tonnes of eleven critical minerals.^[39]

Figure 3: Funding Process for a South Korean Company

Source: Korea EXIM Bank^[40]

Figure 4: Mining in South Korea (Existing and New Mines)

Source: Raphael Deberdt and Hyeyoon Park^[41]

Support for domestic production also forms part of Korea’s import diversification strategy. For instance, the revival of the Sangdong tungsten mine, with a 58 million-tonne reserve in South Korea, is an attempt to reduce the country’s dependence on China for the mineral.^[42] Even though South Korea does not possess huge reserves of minerals, for some, such as tungsten, the country has taken steps to move in that direction.^[43]

Figure 5: South Korea’s Stockpile of Minerals

Source: Statista^[44]

Mineral Diplomacy 

South Korea’s mineral diplomacy stands on three pillars: bilateral partnerships, minilateral and multilateral cooperation, and region-specific strategies. The core focus is strengthening ties with resource-rich countries (see Table 3). To fulfil this, South Korea has developed strong bilateral partnerships centred on supply-chain coordination, processing technology, and technical support.

South Korea remains highly dependent on China for critical minerals. Around 95 percent of its rare-earth imports originate from China, alongside 78 percent of niobium, 84 percent of magnesium, 93 percent of indium, and 98 percent of gallium.^[45] To address this vulnerability, South Korea has expanded cooperation with alternative suppliers. Vietnam has emerged as a key partner for rare-earth diversification, with the launch of a critical mineral supply-chain centre and investments by firms like LS Cable and System in processing infrastructure. In Africa, South Korea has strengthened its critical mineral cooperation with countries like Tanzania, Zimbabwe, and South Africa, all of which have huge reserves.^[46]

As part of its regional diplomacy, South Korea has announced specific initiatives. For example, dedicated to the Central Asian region, the K-Silk Road initiative was announced in 2024, focusing on four partnership pillars, one being resources.^[47] This initiative will enable South Korea to form a tailored cooperative mechanism with all Central Asian countries, particularly Kazakhstan, Uzbekistan, and Turkmenistan.^[48] Other regional frameworks focusing on critical minerals include the Korea-Africa Summit and the Korea-Latin America dialogue mechanisms.^[49]

South Korea has also invested in multilateral initiatives through global groupings such as the Mineral Security Partnership (MSP) and minilateral initiatives like the US-Korea-Japan trilateral. For instance, in collaboration with the US, South Korea launched an Embassy Science Fellows (ESF) project in 2023 on rare-earth extraction in Vietnam.^[50] The project aims to explore an environment-friendly approach for rare-earth metal extraction under the MSP framework.^[51] As chair of the MSP, South Korea showed its prowess in the critical mineral supply chain,^[52] expanding policy support for various projects.^[53]

Table 3: South Korea’s Cooperation on Critical Mineral Supply Chain (Select Countries)

Countries/Regions	Initiatives	Year Announced	Sectors
Africa[54]	Korea-Africa Critical Minerals Dialogue	2024	Development of industries related to the critical mineral sector through knowledge sharing and technical support
Peru[55]	MoU on Critical Mineral Supply Chain Cooperation	2024	Cooperation in critical minerals policy, supply chain information sharing, technical exchanges, joint exploration, and development
Australia[56]       (Western Australia)[57]	MoU on Cooperation in Critical Mineral Supply Chains   MoU on strengthening bilateral energy cooperation, including critical minerals	2021           2024	Cooperation on the exploration and development of mining resources
Chile[58]	MoU on Mineral Cooperation	2022	Research and development cooperation on sustainable mining and mining processes
Mongolia	MoU on Cooperation of the Rare Metals Supply Chain	2023	Korea-Mongolia Rare Earth Joint Cooperation Committee   Korean-Mongolian Rare Metals Cooperation Centre Project
Central Asian Countries     Kazakhstan[59] and Uzbekistan	Korea-Central Asia Summit     MoU on Critical Mineral supply chain	2024         2024	Enables joint exploration, development, and commercialisation across the mining and refining segments.

Source: Author’s own, using various sources

Recycling 

As part of its broader supply-chain strategy, South Korea emphasises recycling waste; the target is to increase the use of recycled minerals from 2 percent to 20 percent by 2030.^[60] These include lithium, cobalt, manganese, nickel, and five REEs.^[61] Some companies have already invested in the sector and are exploring global opportunities. In 2021, LG Chem entered the battery recycling sector through investment in Canada-based Li-cycle and secured an agreement to source  20,000 tonnes of nickel between 2023 and 2033.^[62] Another company, SK Innovation, has signed a Memorandum of Understanding (MoU) with Texas-based KBR to develop lithium hydroxide recovery technology from used batteries.^[63]

The government’s recycling strategy has four parts: creating an industrial cluster/ecosystem; fostering companies; streamlining existing regulations; and building infrastructure in the critical mineral recycling business.^[64] Choi Sang-mok, former economic minister, has said about the importance of recycling: “The critical minerals recycling business will play a key role in the stabilization of the supply chain, along with the diversification of imports.”^[65] Former Prime Minister Han Duck-soo has also said, “​​The government will spare no effort in supporting rechargeable battery companies through comprehensive measures, including infrastructure, R&D, taxation, financing, and more.”^[66]

The Role of Private Sector

The private sector plays an important role in implementing South Korea’s critical minerals strategy and reinforcing the thrust of its economic security objectives. The bigger players in the relevant sectors, such as POSCO International, Samsung C&T, Hyundai, and LG, have contributed to bolstering South Korea’s mineral security by collaborating with foreign players in the midstream and downstream segments of the mineral supply chain. Venturing into the mining sector is driven by their business interests, particularly due to the secondary battery supply chain—an attractive industry from a business viewpoint. Greater participation promises an uninterrupted supply of raw minerals for their semiconductor and electronics manufacturing industries too.

The private sector aims to move in this direction through joint investments with automotive OEMs and battery manufacturers, reducing their strategic dependence on Chinese companies. Many private companies in the battery supply chain have focused on strengthening their competitiveness in metal procurement by working closely with mining companies. The strategic presence across the supply chain gives local companies an edge. It brings strategic benefits in the EV, advanced chips, AI, and green tech sectors, where the demand for minerals is growing exponentially. Through these steps, the private industries have aligned their business interests with the country's national security and other regional legislation, like the previous one in the US called the Inflation Reduction Act (IRA) and the EU’s Critical Raw Materials Act (CRMA). POSCO Chairman Chang In-wha, speaking on the importance of raw material for batteries, said of his decision to increase foreign investment, “We will continue to discover projects that contribute to improving the global competitiveness of the national key industries such as secondary battery materials.”^[67]

Figure 6: Top Battery Manufacturers in the World

Source: Statista^[68]

South Korea’s private sector remains competitive and innovative through direct involvement with the critical mineral supply chain, particularly in the midstream and downstream segments. This strategy has helped consolidate South Korea’s position among the world’s leading battery manufacturers. At present, three South Korean companies are among the top 10 battery manufacturers globally: LG Energy Solution, SK On, and Samsung SDI (see Figure 6). A major player in the supply chain, LG Chem, is pursuing greater cooperation to protect its supply chain from potential external conflict.^[69]

Table 4: Private Sector Investment in Critical Mineral Supply Chain: Domestic and Overseas

Private Industries	Investments	Focus Area	Year Signed	Sector
POSCO International Corporation[70]	Investment in the second-largest graphite mine in Tanzania	Graphite	2021	Bought a 19.9-percent stake in Australia’s Block Rock Mining Ltd, which has an 84 percent stake in the Mahenge Graphite Project in Mahenge, Tanzania
LG Chem[71]	Signed an Offtake agreement with Piedmont Lithium Inc             MoU with Exxon Mobil Corporation           Signed an Offtake agreement with Queensland Pacific Metals (QSM)                 Signed Binding Agreement with Vulcan Energy Sources	Battery Supply Chain                   Lithium Carbonate             Nickel and Cobalt                           Lithium	2023                         2024                 2021                                 2022	Took a 6-percent stake in Piedmont, a Lithium mining company based in North America, for US$75 million. Multi-year Offtake agreement for 100,000 metric tonnes of Lithium Carbonate Invested US$10.5 million on a 7.5-percent stake. QPM will sell 10,000t of contained nickel and 1000t of contained cobalt as part of the agreement. Will buy 50,000 metric tonnes of battery-grade lithium chemicals from 2025 for five years, with the option to extend the agreement by five more years
Samsung SDI[72]	Invest US$18.3 million in Canada Nickel Company Inc.	Battery Supply Chain	2024	Samsung will purchase an 8.7 percent stake in the company to secure the supplies of Nickel and Cobalt   Besides equity, Samsung SDI will also be granted rights for the production of nickel and cobalt over the mine’s life
SK On	Signed a MoU with Australia-based Global Lithium Resources         Signed an offtake agreement with Lake Resources[73]	Battery Supply Chain                 Battery Supply Chain	2022                     2022	Comprehensive cooperation in lithium supply, joint investments, and development of downstream lithium assets.   SK will acquire 10 percent of Lake Resources. Offtake of 50 percent of Lithium products from the Kachi project
POSCO[74]	Establishes strategic partnership with Pilbara Minerals         Opened two lithium hydroxide plants in Korea	Production of Lithium Hydroxide             Lithium hydroxide	2018                   2024	Acquires 4.75 percent of Pilbara Minerals, an Australian hard rock lithium producer   Establishes a JV, POSCOS Pilbara Lithium Solution with Pilbara, with 82-percent stakes. The JV focuses on producing 21.5 thousand tonnes per annum (ktpa) of lithium hydroxide
LG Energy Solutions[75]	Signed an MoU to develop a joint investment project and a long-term agreement with Chile’s SQM S. A., the world’s top lithium producer	Lithium	2022	SQM will supply 100,000 tonnes of lithium from 2023 to 2029

Source: Author’s own, using various sources

South Korea’s private companies have strategically developed critical capabilities across the supply chain by leveraging the government’s astute mineral diplomacy and crafting their own business strategy. For instance, POSCO's buying stakes in Pilbara Minerals in 2018, securing imports of raw lithium ore for 20 years—and building two subsequent plants in South Korea producing lithium hydroxide for rechargeable batteries—have consolidated its presence in the entire supply chain, starting from upstream to downstream.^[76]

Figure 7: POSCO Future Plans for Lithium

Source: POSCO^[77]

Japan: Public-Private Linkages and Economic Intelligence

Japan is pursuing de-risking efforts to ensure it is not rendered strategically dependent on a single country for its critical mineral requirements. It was among the first countries to understand China’s strategy of coercion via the politicisation of critical mineral exports. Japan views the critical mineral supply chain from an economic security lens, which means the private sector is not a junior partner but a critical stakeholder in the efforts. Tokyo has focused on economic intelligence and creating closer public-private linkages as part of its economic security approach. It has identified 35 minerals as critical.^[78]

Japan’s Mineral Supply Chain Strategy

To strengthen its mineral security, Japan adopted an institutional, whole-of-system approach managed by a dedicated authority. The Japan Organization for Metals and Energy Security (JOGMEC), established in 2004, oversees the country’s mineral security. It is responsible for implementing policy, promoting resource diversification, supporting overseas investments, advancing innovation in mineral exploration and metal resource recycling, and reducing dependence on rare-earths.

Its mandate can be divided into four parts: providing support for exploration and development, supporting efforts to control mine pollution, research and development, and stockpiling efforts (see Figure 8). The organisation resulted from integrating the Japan National Oil Corporation and the Metal Mining Agency of Japan, which focused on ensuring a stable supply of mineral resources and non-ferrous metals, including implementing pollution control mechanisms.^[79] The Japan Bank for International Cooperation (JBIC)^[80] and the Japan External Trade Organization (JETRO) also play key financial and trade-facilitation roles. For example, until FY20, JOGMEC’s budget for exploration and asset acquisition investments, exploration loans, and debt guarantees were US$420 million, US$40 million, and US$140 million, respectively.^[81]

Table 5: Initiatives Undertaken by the Japanese Government

Initiatives	Policy Intervention
Legislation and Policy Support	●      Economic Security Protection Act Passed in May 2022
Fiscal Incentives[82]	●      JOGMEC provides 50 percent of the cost as a subsidy for Joint Projects between a Japanese and a Foreign company ●      Japan Bank for International Cooperation[b] has a separate system for loans and debt guarantees for overseas mineral resource projects
Overseas Development Support	●      Support for equity investment in foreign companies ●      Tax incentives enhancement for overseas mineral investment used in the semiconductor and battery industries. ●      State will provide 50 percent of the developmental costs, and in case of the project's failure, will reduce the repayment costs by 80 percent
Stockpiling[83]	●      National rare metals stockpiling programme. ●      Target of 60 days for the most critical minerals and 180 days for high-risk critical minerals
Recycling[84]	●      Act on promotion of recycling waste (Advancement of recycling business act, and Act on promotion of recycling of small waste electrical and electronic equipment) ●      National Plan towards Circular Economy ●      Urban Mining initiatives domestically ●      Investment in recycling projects overseas ●      Establishing a joint framework on recycling with ASEAN, focused on sharing technical support.

Source: Quest Metals^[85]

Figure 8: JOGMEC’s Mandate

Source: Katayama^[86]

JOGMEC's working agreements with its counterparts, primarily state-owned mining companies of resident countries, ensure that Japanese companies can work on the project if the joint geological surveys are successful. After receiving the approval on the project, Japanese private companies continue to receive assistance from JOGMEC, as illustrated in Figure 9. Out of 160 projects, seven are related to diversification, 65 to reduction, 62 to recycling, and 26 to end-user research.^[87]

Figure 9: JOGMEC’s Exploration/Development Process for Overseas Projects

Source: JOGMEC^[88]

Japan’s de-risking efforts were shaped by a pivotal episode that exposed its strategic vulnerability. In 2010, following a maritime collision between Chinese and Japanese vessels, Beijing stopped its REE exports to Japan. The incident alarmed policymakers and industry, underscoring the risks of concentrated dependence. Japan's mineral security strategy stands on four critical strands: mineral diplomacy (providing financial support), investing in supply chain innovation (R&D), stockpiling, and recycling.

Mineral Diplomacy 

Japan’s mineral diplomacy stands on three pillars: bilateral, minilateral, and multilateral cooperation to secure resources. In 2011, JOGMEC and Sojitz Corporation invested US$250 million in Australia’s Lynas Corporation Limited through a combination of loans and equity, securing almost 8,500 tonnes of rare-earth products over a ten-year period.^[89] These strategic investments strengthened Japan’s supply chain resilience, with Lynas now supplying around 90 percent of Japan’s praseodymium and neodymium requirements.^[90] Owing to these efforts by JOGMEC, Japan has reduced its REE import dependence on China from 90 percent to 58 percent—a considerable achievement.^[91] In 2018, Japan's dependence on China for REEs reduced to 48.5 percent.^[92] Recent investment in the rare-earth project in France will further bolster Japan’s rare-earth demand, securing 50 percent of the Heavy REEs produced.^[93] The project is expected to cover 20 percent of Japan’s heavy rare-earth demand in the future, producing 500 tonnes of dysprosium and 90 tonnes of terbium.^[94] The expectation is that through these investments, Japan will further reduce imports below 50 percent in 2025.^[95]

Japan’s mineral diplomacy also emphasises capacity-building in partner countries, particularly in Africa. For instance, in collaboration with UN Trade and Development (UNCTAD), Japan launched a project promoting local processing capacity and value addition. The funding enables UNCTAD to provide technical assistance and policy advice on value addition and diversification.^[96] Similar initiatives are undertaken with like-minded countries in the region, including India, which has deepened its cooperation with Japan, particularly for refining rare-earths through the Toyota Tsusho refiner based in Andhra Pradesh, India.

Table 6: Japan’s Cooperation with Other Countries on Critical Mineral Supply Chain

Countries/Regions	Initiatives	Sectors
India[97]	MoU on Mineral Resources	Exchange of information on mineral resources, processing, refining, and stockpiling of resources. Promoting joint investment in exploration, mining, and processing in India and third countries.
US[98]	MoU on Strengthening Critical Mineral Supply Chain	Commitment to strengthen and diversify the mineral supply chain for clear energy and EV batteries. Importance of fair trade, labour rights, sustainable sourcing, and environmental protection.
Peru[99]	Ten-year strategic roadmap & MOC for the cooperation in the field of mining and mineral resources[100]	Cooperation on mineral mining technology and information exchange, and sharing of international best practices.[101]
Indonesia	Memorandum of Agreement to enhance Human Resource Development[102]	Exchange of knowledge and skills, and technical support.
African Countries[103]   DRC         Namibia  Zambia	MoU signed in 2012         MoU signed in 2022                   MoU signed in 2023 for strengthening cooperation in the field of exploration.	Focus on satellite monitoring and image analysis, strengthening support in the exploration sector, and environmental monitoring.   Areas of focus include cooperation in supply chain research to promote the development of rare-earths, training in metallic mineral resource exploration technology using satellite images and geographic information systems, joint analysis, and field surveys.   Upgrade of the 2018 MoU. Focuses on knowledge exchanges through seminars, and aims to achieve an annual copper production of 3 million tonnes.

Source: Author’s own, using various sources

Through mineral diplomacy, Japan supports capacity-building in resource-rich countries by providing technical assistance, including remote sensing and geological survey analysis. For instance, in Peru,^[104] cooperation has focused on improving copper ore processing and environmental monitoring at mining sites. Besides, it has also supported foreign companies by investing in risky and unsustainable projects. This has helped other countries develop their capacities, particularly in the developing world. Investment in Namibia Critical Mineral Co Ltd in Namibia, Lynas in Australia, and Carester SAS in France are vital examples.

Since 2004, JOGMEC has invested US$600 million in 100 critical mineral projects worldwide,^[105] and currently oversees 30 operations in 15 countries.^[106] As part of its multilateral diplomacy, Japan has also worked with like-minded countries through a multilateral framework to strengthen supply chain issues, through the Mineral Security Partnership and the G7.^[107]

Table 7: Japan’s Investment in Foreign Countries

Country	Projects Ongoing or in the Pipeline	Minerals
Namibia[108]	JOGMEC is partnering with Namibia Critical Mineral Inc. to develop the Lofdal Heavy Rare Earth Project	Deposit rich in Yttrium, Dysprosium, and Terbium (Critical REE)
France	JOGMEC, with Iwatani Corporation, an oil company based in Japan, will invest US$120 million in a rare earth refining project	Heavy Rare-Earth Project
Tanzania[109]	JOGMEC signed an MoU with LifeZone Metals to establish a strategic partnership.	Will be able to secure cleaner metals from the Kabanga Nickel Project
Kazakhstan[110]	Sumitomo Corporation and Kazatomprom formed a Joint Venture	In the JV called the Summit Atom Rare Earth Cop Ltd., Sumitomo holds a stake of 49 percent. The project focuses on the recovery of rare-earths from Uranium ore residue.

Source: Author’s own, using various sources

A vital part of the strategy is strengthening cooperation between Japanese businesses and companies with local stakeholders through technical visits, joint research projects, consultations, and investment seminars to exchange information. For instance, recent events in India^[111] and Brazil^[112] are ways Japan brings them together to forge and explore areas of closer cooperation.

Another area in which Japan has shown its way is by supporting through a sustainable funding mechanism, enabling the private sector to undertake high-risk mining projects through geological surveys and exploration projects.^[113] Many of these projects are long-term financial assistance supported through equity, loans and debt guarantees, a way to fast-track project execution and implementation, spanning the supply chain—exploration, mining, refining, and processing.^[114] For instance, JOGMEC provided 50 percent of the exploration costs to Toyota Tsusho Corporation for the Salar De Olaroz Lithium Project in Argentina in 2011. Similarly, it offered 75 percent of the financial cost for an REE project.^[115] This was part of its overseas joint geological survey scheme, which included a joint study for lithium recovery from natural brine and a feasibility study on infrastructure, like access to electricity in the Puna region, Argentina.^[116] The Japanese private sector has received greater support from JOGMEC when aligning itself with standards such as ESG requirements.

Figure 10: Joint Venture Investment in French Rare-Earth Project

Source: METI, Japan^[117]

Recycling

Japan has also prioritised recycling, particularly through urban mining^[c] and advanced smelting techniques that offer a lower environmental footprint than traditional mining. It is estimated that used electronics in Japan contain 300,000 tonnes of rare-earths, and another 650,000 tonnes of small appliances have metals worth US$571 million.^[118]

Japan has also partnered with countries like France as part of its recycling initiative to support a rare-earth refining project in France. This became possible due to a Joint Venture between JOGMEC and Iwatani Corporation, Japan-France Rare Earth Corporation Limited, which invested in Caremag SAS, a subsidiary of Carester SAS (see Figure 10).^[119] This project will separate rare-earths from 2,000 tonnes of recycled magnets and 5,000 tonnes of raw ores, producing individual rare-earth oxides.^[120]

Private companies like Hitachi^[121] and Mitsubishi^[122] have also entered the sector. Japan also shares technical support^[123] with five ASEAN countries, including Indonesia and Vietnam, as part of its mineral diplomacy.^[124] An example of Japan’s recycling efforts was during the Tokyo Olympics, where medals were made from recycled metal extracted from 6.21 million used mobile phones.^[125]

Stockpiling and R&D 

Another critical part of Japan’s mineral strategy is to make its supply chain resilient through robust national and private stockpiling. Some selected stockpiled metals include nickel, vanadium, molybdenum, manganese, tungsten, and cobalt.^[126] The government and the private sector manages the stockpiles, ensuring smooth industrial functioning and business needs. They are managed at specific locations by the government and individual companies, supervised by the Japan Rare Metals Stockpiling Association.^[127] Investing in alternatives is also necessary for Japan. In collaboration with private businesses, the Japanese government is exploring other options for rare-earths. For instance, Ivan Espinosa, CEO of Nissan, a Japanese car company, has remarked, “We need to continue finding alternatives for the future, keeping flexibility and keeping our options open.”^[128] Japan’s emphasis on stockpiling highlights the importance of having a comprehensive outlook of the mineral supply chain, rather than looking at the issue in silos.

Figure 11: Stockpiled Minerals in Japan

Source: JOGMEC^[129]

Mapping Opportunities and Confronting Challenges

An analysis of South Korea’s and Japan's mineral supply chain strategies offers critical lessons for countries seeking to establish a resilient mineral supply chain, including India. Both countries base their approach to mineral security on close cooperation with the private sector, supported by fiscal and non-fiscal measures for mineral diplomacy. Government policies move in lockstep with private sector ambitions and business considerations, while firms respond swiftly in alignment with state-led strategic goals.

Given their export-driven economies—particularly in semiconductors, electronics, and pharmaceuticals—both countries recognise that secure access to natural resources is indispensable for economic growth. As a result, an overarching economic security framework has been created.

While Japan had the early-mover advantage, South Korea has advanced rapidly despite its more recent focus on supply chain resilience. Sharing a common objective of mineral security with Japan, South Korea’s mineral strategy is more tailored to its economic interests, primarily focused on powering its growing EV and semiconductor industries. This was possible due to the South Korean government's focus on a tailored supply chain strategy for all upstream, midstream, and downstream segments, working alongside the private sector. Nonetheless, a few differences exist between South Korea and Japan, for instance, in the midstream segment. South Korea has emphasised establishing processing facilities domestically, as opposed to Japan, which continues with the old model, focused on catering to the upstream supply chain. Although this decision may look fortuitous, it has strategic benefits, considering the stockpile minerals need processing capacities for battery manufacturing.^[130]

On the other hand, Japan’s institutional approach has proved to be a better-suited model for mineral security, particularly the upstreaming processes. JOGMEC serves as a central authority overseeing metal-related activities, including exploration support, R&D, environmental safeguards, and stockpiling. However, it has its own weaknesses. Japan's focus on overseas mining investments is not accompanied by initiatives in other midstream and upstream segments. This shortcoming, however, does not exist in South Korea’s case due to the private sector’s greater focus on developing capacities in the mid- and downstream segments. Acknowledging this, KOMIR’s head, Hwang Young-sik has said, “Unless the private sector, government, and public entities are engaged in organic cooperation amid the world’s desperate efforts to secure core resources, we are destined to fall behind in survival competition.”^[131]

Table 8: Lessons from Japan’s and South Korea’s CM Strategies

Sector	Common Initiatives
Legislative and Policy Framework	●      Strong legislative and policy framework supporting the supply chain and mineral security. ●      Clear goals, objectives, and timelines ●      Follow-up mechanisms, including ministerial committees and consultative dialogues. ●      Early-warning system to monitor and respond to mineral crises.
Financial	●      Mechanism for the private sector to access funds for projects across the downstream, midstream, and upstream segments through dedicated institutions. ●      Provision for the private sector to get loan guarantees and equity for investing in mining and extraction. ●      A risk-sharing system is present for the private sector
Technical Support	●      Institutional support for technical expertise, including surveys, seminars, workshops, and the financial viability of projects
Others	●      Increased support for alternative methods and facilities such as recycling, stockpiling, and R&D. ●      Contingency planning is in place.

Source: Author’s own

On overseas mining, the South Korean and Japanese models are broadly similar, both supporting private sector projects through equity and debt financing to mitigate risk. However, they differ in execution. South Korea encourages firms to view the supply chain more cohesively, but its emphasis remains concentrated on the midstream and downstream segments. Meanwhile, Japan’s public-private partnership model has been effective in mining and extraction but has overlooked the battery development segment, where it lags behind. In short, the Korean model has mastered the downstream segments, while Japan has focused on the upstream and midstream segments of the supply chain (see Tables 2 and 5). 

Japan and South Korea are also leveraging new opportunities in the deep-sea mining sector. Japan has allocated 215.8 billion yen for deep-sea mining by 2028.^[132] South Korea has also invested heavily in the future of mining, particularly in deep-sea mining. Korea Zinc invested US$85.2 million in The Metals Company (TMZ), becoming a strategic investor and partner.^[133] The investment focuses on developing deep-sea mining in the US.

The company is exploring further cooperation with TMZ in “processing, refining, and potentially precursor cathode active material manufacturing capacity.”^[134] Recently, according to a survey, Japan also discovered 200 million tonnes near the coast of Minami-Torishima of manganese nodules and other concentrations rich in rare metals such as cobalt and nickel, as shown in Figure 12.^[135] Japan plans to commercialise this by 2026. South Korea has exploration rights for five deep-sea blocks, covering approximately 100,000 square kilometres across the Pacific and the Indian Oceans.^[136]

Figure 12: Japan’s Mining Operation Planned in the Deep Seas

*Deep-sea mining is planned within Japan’s exclusive zone near Minami Torishima Island

Source: Yutaro Takaya et al.^[137]

While South Korea’s and Japan's critical mineral strategies both recognise that China continues to be and will remain dominant in the mineral supply chain, they do not resign themselves to it. Instead, their respective mineral strategies outline targeted plans to address the risks associated with their dependence in the short and long term, as well as during peacetime and conflict scenarios.

Conclusion

Formulated in response to China’s politicisation and weaponisation of the mineral supply chain, the mineral strategies of South Korea and Japan have worked well compared to those of other countries, including bigger players like the US and Europe. A comprehensive legislative and policy framework, supported by the government’s sustainable funding mechanism and facilities such as stockpiling, recycling, research, and innovation, establishes a strong foundation for mineral security for South Korea and Japan.

The frameworks, institutions, and initiatives being implemented by both countries, aligned with industrial policy and supported by private sector efforts, have helped them direct more investment in the mineral supply chain across segments—from mining, extracting, processing, and refining, to value addition. Some of the outcomes resulting from these steps will benefit Japan and South Korea in the medium to long term. Reduction in their dependence on China for rare-earths and a more resilient lithium supply chain are examples.

Nonetheless, huge dependencies for other mineral supply chains still exist, highlighting the remaining limitations. This would require more cooperation with like-minded countries to reduce this strategic vulnerability and explore new opportunities, such as deep-sea mining. In conclusion, while the goal of mineral security is not easy for any country to achieve, the presence of a framework and its execution and implementation are equally critical. South Korea and Japan have the latter in place; what is now required is greater effort to push for an alternative supply chain with like-minded countries.​

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Abhishek Sharma is Junior Fellow, Strategic Studies Programme, ORF.

The author thanks Shreya Mishra for her research assistance. 

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All views expressed in this publication are solely those of the author, and do not represent the Observer Research Foundation, either in its entirety or its officials and personnel.

Endnotes

• Critical Minerals
• East Asia
• china critical minerals export ban
• critical mineral supply chain
• critical minerals
• critical minerals race
• critical minerals security
• japan critical minerals
• japan critical minerals exports
• south korea critical minerals
• south korea critical minerals exports

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