Korea in emergency mode as China intensifies export control on gallium

A machine is digging up soil containing rare earth minerals at a mine in Inner Mongolia, China. [Photo by Reuters/Yonhap]

South Korea has launched an emergency inspection of the supply chain for rare earth minerals as China intensifies its export control on resources amid escalation tension with the U.S.

According to multiple industry sources on Thursday, the Ministry of Trade, Industry and Energy held an industry supply chain inspection meeting on Tuesday led by Joo Young-joon, deputy minister for the Office of Industrial Policy. The meeting came after China on Monday announced export curbs on gallium and germanium.

Chips and display manufacturers also attended the government-led meeting. The government assessed that there is significant uncertainty for rare earth minerals with high dependence on China and asked the industry to provide information on the supply situation and diversification plan.

Rare earth minerals are mainly used for semiconductor polishing agents, catalysts for exhaust gas treatment and fluorescent material production.

According to the industry ministry, China accounts for 86 percent of the imports of rare earth minerals used in permanent magnets for electric vehicles and other applications as of 2021. More than half of the rare earth mineral imports for chip polishing agents also come from China.

The Korean government is taking a swift move as this is not the first time that China has exerted pressure on rare earth minerals.

China used rare earth minerals as a diplomatic weapon by controlling exports in 2010 during the Senkaku Islands territorial dispute with Japan. In 2019, China reviewed the possibility of controlling exports of rare earth minerals as a response to the U.S. sanctions on Huawei.

Unlike in the past, the industry believes that it is somewhat prepared for China’s export curbs as it has found new supply options for rare earth minerals, such as Vietnam.

In December last year, Australian mining company ASM signed a contract to annually supply 1,000~2,000 tons of rare earth oxide produced in Vietnam. The rare earth oxide is imported to Korea and refined in Ochang, North Chungcheong Province.