|Chungcheongbuk-do Signed a Business Agreement for Implementation of a Global Rare Earth Supply Chain|
On December 15, 2022, Chungcheongbuk-do signed a business agreement to implement a global rare earth supply chain with Australian Strategic Materials Ltd. (ASM), Korean Strategic Materials Metals (KSMM), and Vietnam Rare Earth JSC (VTRE), at the VTRE rare earth plant in Phu Ly, Ha Nam, Vietnam.
Kim Young-hwan, the governor of Chungcheongbuk-do, Moon Seok-jin, the President of Asia of ASM, Luu Anh Tuan, the chairman of VTRE, Lee Jong-seop, the regional head of Southeast Asia and Oceania headquarters of Korea Trade-Investment Promotion Agency (KOTRA) and other officials attended the ceremony.
As KSMM, the only company manufacturing rare earth metals and rare metals in South Korea, opened the Ochang plant in May, this business agreement aims to attract companies related to rare earth elements and secure the rare earth supply chain.
The following is the main terms of the agreement: Chungcheongbuk-do's administrative support to VTRE and KSMM concerning the supply of rare earth oxide; VTRE and KSMM's reasonable effort to agree on the long-run supply of rare earth elements; VTRE agreeing on making a reasonable effort to develop mines to secure the ability for supplying rare earth elements equivalent to $50 million for five years from 2023 upon agreeing to the commercial terms of supply; VTRE being granted more opportunities in Korea by attracting investment or cooperation with the administrative help of Chungcheongbuk-do.
The agreement enables Chungcheongbuk-do to establish a production base for rare earth elements called “vitamins of industry,” which are essential in the high-tech industry. This also provides an opportunity for Chungcheongbuk-do to pave the way for increasing competitiveness in the high-tech industry through establishing a rare earth cluster.
Rare earth elements are globally wanted as a strategic resource, and China owns 80% of the global supply chain, which increases the possibility of rising resource nationalism, especially due to the trade conflict between the US and China. Thus, efforts to lower dependency on Chinese rare earth and localize the supply chain are needed to ensure the stable development of high-tech industries.
“After signing this business agreement today, Chungcheongbuk-do will be the center of rare earth industry by establishing the only rare earth value chain in South Korea,” Kim Young-hwan, the governor of Chungcheongbuk-do, said. He added, “I will speed up the process of building a rare earth cluster cooperating closely with related companies and supporting agencies.”