The Australian government has penned a strategic cooperation agreement with South Korea, covering rare earths, lithium, graphite, cobalt and nickel during South Korean President Moon Jae-in’s diplomatic visit in December 2021.

Australia’s mineral exports account for 12% of its GDP in 2019 and is targeting an increased production of rare earths which have become integral to the production of EVs and other more sustainable consumer products. Australia is the world’s biggest producer and exporter of lithium, a key component in the production of batteries, and research has shown that Australia holds the second- and the sixth- largest reserves of cobalt and rare earth elements. Analysts have noted that demand for these minerals is expected to increase 50x by 2050 according to the International Energy Agency, making this a crucial period for Australian mining to receive external investment.

The “Memorandum of Understanding on Cooperation in Critical Mineral Supply Chains” between South Korea and Australia solidifies South Korea as a key energy and resources export partner, with Australia currently supplying 40% of South Korea’s rare earths. Dr Troy Lee-Brown from Murdoch University notes that the above agreement may be seen as an attempt to move away from the use of China’s exports of rare earths and cobalt, as the country produces and processes between 80-90% of the world’s supply, and has used its supply of said rare earths as a political tool. Recently, China has reduced supply of rare earths to Japan over the long-standing dispute over the Senkaku/Diaoyu Islands. China has also implemented a wave of trade restrictions against Australia, halting the supply of Australian coal and liquefied natural gas.

Australia and South Korea have also signed a USD $72 million funding commitment for the development of green hydrogen, carbon capture and storage, and low-emissions steel and iron ore production technologies. This follows Korean corporations investing heavily into Australian mining projects with multiple-year offtake agreements and memorandums of understanding.

Source: https://www.mining-technology.com/features/australia-and-south-korea-critical-minerals/