South Korea Boosts Rare Earth Reserves as China Tightens Grip-but Is It Too Little, Too Late?

Highlights

• China’s new export controls on seven key rare earth elements pose significant risks to South Korea’s EV, battery, semiconductor, and defense sectors.
• South Korea’s six-month buffer stock is insufficient protection against potential supply chain bottlenecks controlled by China’s 99% processing monopoly.
• Without domestic refining capacity and reliable alternative sources, Seoul remains vulnerable to China’s strategic economic manipulation.

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In the shadow of China’s sweeping new export controls on heavy rare earth elements, South Korea is scrambling to reassure industry leaders and the public. With roughly half its rare earth imports still sourced from China, Seoul has confirmed a six-month buffer stock of critical materials like dysprosium and yttrium—yet experts warn the reserve is a Band-Aid, not a shield.

China’s April 4 move to restrict exports of seven key rare earths, including terbium, samarium, and scandium, marks a sharp escalation in the ongoing global trade war. While Beijing frames it as regulatory streamlining, analysts and industry insiders recognize it as a thinly veiled form of economic coercion—one that threatens to stall South Korea’s EV, battery, semiconductor, and defense industries. With 99% of global heavy rare earth processing still controlled by China, supply chain bottlenecks are not hypothetical—they’re imminent.

South Korea’s stockpile, while a step forward, reflects strategic complacency. The Korea Herald (opens in a new tab) rightly notes the drop in China’s share of Korean imports since 2019—from 71.6% to 47.5%—but neglects to emphasize where the rest is coming from. If alternative suppliers are still dependent on Chinese midstream processing, the risk remains centralized. Moreover, the article misses the underlying threat: China’s ability to paralyze global innovation by manipulating downstream magnet exports, not just raw materials.

Korea is making progress, but the buffer is too shallow, and the diversification strategy is incomplete. As trade tensions harden, stockpiling alone won’t protect the economy. Without domestic refining capacity or reliable alternative sources, Seoul remains dangerously exposed to the next twist in China’s rare earth playbook.

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