Government Strives to Secure Raw Material Supply Chains... Focuses on 'Five Central Asian Countries'

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] The government is considering including the 'Five Central Asian Countries,' such as Kazakhstan, as multilateral cooperation partners to prepare for raw material supply disruptions caused by external factors like the Russia-Ukraine conflict. While bilateral cooperation with highly interdependent allies such as the Philippines and Mexico remains fundamental, the government is exploring the possibility of multilateral cooperation with the Five Central Asian Countries, which are rich in uranium and iron ore.

On the 24th, the Ministry of Trade, Industry and Energy held a meeting at the Lotte Hotel in Myeongdong, Seoul, with ambassadors from nine resource-rich countries highly interdependent with South Korea, including Vietnam, the Philippines, Mexico, and Canada, to discuss raw material supply chain cooperation measures. This is a follow-up action to stabilize the supply of 'key economic security items' announced at the 4th Foreign Economic Security Strategy Meeting held earlier.

Although specific supply chain discussions on certain raw materials between countries were not disclosed at this meeting, it is known that alternative sources need to be secured mainly for some highly dependent items such as neon gas among Ukraine-imported raw materials, and alloys, minerals, and anthracite from Russia. The government’s plan is to stabilize resource supply through strategic partnerships between the South Korean government, which possesses raw material production technology, and resource-rich countries.

Although not included among the nine countries at this meeting, the Ministry of Trade, Industry and Energy is also considering the Five Central Asian Countries (Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, Tajikistan) as multilateral cooperation partners to secure raw material supply chains. Uzbekistan, in particular, is one of the resource-rich countries abundant in natural resources, with significant production of natural gas, crude oil, and mineral resources.

Reserves and Production Scale Rankings of Major Minerals in Kazakhstan. (Source=KOTRA)

According to KOTRA, as of 2020, Kazakhstan produced various types of raw materials including 113 million tons of coal, 45 million tons of iron ore, and 15 million tons of limestone. It ranked first in the world for tungsten reserves (63% of the global total) and fourth in production volume, while uranium reserves ranked second globally and production volume first. Uzbekistan is also rich in uranium and gold.

A government official said, "The Five Central Asian Countries, including Kazakhstan, Uzbekistan, and Kyrgyzstan, have difficulties in bilateral cooperation individually due to the unique characteristics of each country," but added, "Considering the similar cultural sphere and smooth communication among these countries, multilateral cooperation can be considered." This means approaching multilateral cooperation focusing on countries where the added value of raw materials can be enhanced through technical cooperation such as Official Development Assistance (ODA) and Research and Development (R&D).

In fact, the government’s position is that realistic discussions are fully possible as it has been steadily seeking cooperative projects with these five countries, including the 14th Korea-Central Asia Cooperation Forum held at the end of last year.

However, there are concerns that bilateral and multilateral cooperation may not be smooth in the current situation where supply chain worries are increasing due to external variables such as the Russia-Ukraine conflict. Professor Ingyo Jung of Inha University’s Department of International Trade said, "If export controls are fully implemented due to the Ukraine situation, raw materials including international oil prices could face even greater shocks and difficulties than now."

This content was produced with the assistance of AI translation services.