Supply Chain Instability Due to Ukraine Crisis... Government Strengthens Intergovernmental Cooperation

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] The government is strengthening cooperation networks with major countries that have high interdependence to prepare for raw material supply disruptions caused by Russia's invasion of Ukraine.

According to related ministries on the 26th, the Trade Negotiation Headquarters of the Ministry of Trade, Industry and Energy recently discussed raw material supply chain cooperation with ambassadors from nine countries including Vietnam, the Philippines, Mexico, and Canada stationed in Korea.

In preparation for the increased risk of disruption to the global supply chain due to the Ukraine crisis, the plan is to secure alternative sources focusing on certain highly dependent raw materials imported from Ukraine such as rare gases like neon gas, Russian alloys and minerals, naphtha, and anthracite coal.

First, countries that produce raw materials or possess related technologies will establish a 'strong solidarity and cooperative partnership' to support securing the global competitiveness of domestic industries, while also overcoming raw material supply crises early through cooperation methods such as raw material swaps with partner countries. The government plans to conduct in-depth consultations soon to sign memorandums of understanding (MOUs) with individual partner countries.

To prepare for raw material supply disruptions, the government is considering including the 'five Central Asian countries' such as Kazakhstan as targets for multilateral cooperation. While bilateral cooperation with highly interdependent allies like the Philippines and Mexico will be the basis, the five Central Asian countries, rich in uranium and iron ore, may be considered as multilateral cooperation partners.

Uzbekistan is one of the resource-rich countries with abundant natural resources, producing not only natural gas and crude oil but also a significant amount of mineral resources. According to KOTRA, as of 2020, Kazakhstan produced various 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, and ranked second in uranium reserves and first in production.

The government stated, "By next month, we plan to fully activate bilateral cooperation channels with about 20 countries and prepare customized MOUs reflecting the cooperation demands of each country's governments and companies."

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