The high-tech nation with scarce natural resources and the mineral-rich Central Asian country seek closer cooperation. However, challenges remain in developing supply chains.
South Korea and Mongolia plan to deepen their cooperation on critical raw materials, the South Korean Ministry of Industry announced on Wednesday following a meeting between government representatives from both countries. The partnership aims to support Mongolia in developing its vast mineral resources while helping South Korea secure and stabilize its supply chains. As a high-tech nation with limited natural resources, South Korea seeks to diversify its imports to ensure a more reliable supply for its industries.
Mongolia, on the other hand, boasts extensive mineral reserves and a significant mining sector, which contributes around 25% of the country’s GDP. While coal remains its primary export, the Central Asian nation is also a key producer of minerals such as fluorspar and molybdenum.
Rare Earths and Lithium in Mongolia: Potential and Challenges
The extraction of critical metals essential for the energy transition, such as lithium and rare earths, is still in its early stages. A 2023 joint study by Mongolia’s Mineral Resources Authority and Germany’s Federal Institute for Geosciences and Natural Resources highlighted the need for further exploration efforts and substantial investments (PDF).
For Western investors, one of the key challenges is transportation. As a landlocked country situated between Russia and China, Mongolia depends on its neighbors for export routes. Additionally, due to a lack of domestic processing infrastructure, refining of raw materials would likely need to take place in China.
The South Korean Ministry of Industry also cited these logistical and infrastructural hurdles as reasons for the limited engagement of South Korean companies in Mongolia’s mining sector so far. To address this, a joint center for rare metals will be established to support South Korean businesses in accessing Mongolia’s mineral resources and developing necessary technological solutions. Geological agencies from both countries also plan to conduct joint exploration projects. Furthermore, a research initiative at a Mongolian tin mine will focus on developing mining technologies tailored to local conditions.
Photo: Wirestock, KeithBinns via Canva