[Exclusive] Government to Overhaul Critical Minerals Stockpiling Strategy... Considering Use of Overseas Storage Bases

[Complete Overhaul of Mineral Stockpiling Strategy]
Mid- to Long-Term Plan to Be Reestablished
Strengthening Economic Security with a Multi-Layered Stockpiling System Amid Delays at the Saemangeum Facility

With the spread of geopolitical risks originating from the Middle East and mounting concerns over the stability of the critical minerals supply chain, the government has decided to revamp its stockpiling strategy. The plan is to shift away from a system focused mainly on domestic warehouses and to transition to a multi-layered stockpiling structure that includes overseas joint stockpiling and the utilization of private sector supplies.

According to the Ministry of Economy and Finance and the Ministry of Trade, Industry and Energy on April 20, the government plans to establish a new mid- to long-term plan within the first half of this year, reflecting a 10-year outlook for the supply and demand of critical minerals. Based on this, the direction for expanding stockpiled volumes and infrastructure will be redesigned. The intent is to enhance the management system by treating critical minerals not simply as raw materials, but as "economic security assets."

The government is considering diversifying its stockpiling strategy into multiple layers: overseas joint stockpiling, private sector partnership stockpiling, and distributed network-based stockpiling. The core focus, overseas joint stockpiling, involves securing minerals or intermediate materials at overseas bases in cooperation with producing countries or allied nations. This could include securing quantities by participating in mine development or jointly storing materials near ports and refining facilities. The advantage is that it helps overcome the limitations of domestic storage space and enables securing supplies closer to production sites.

However, some point out that in times of crisis, the host country may restrict exports or prioritize domestic demand, meaning that simple storage alone may not be effective. Therefore, contract terms such as rights to export, priority in transportation, and exemptions from export controls must be included.

The private sector partnership stockpiling approach is also being pursued in parallel. Instead of the government directly purchasing materials, companies' inventories and storage facilities would be utilized in emergencies. For instance, battery material companies or refining and processing firms would operate their stocks independently during normal times, but in crisis situations, supplies would be prioritized for government use under pre-arranged agreements.

Distributed network-based stockpiling, which involves storing supplies across multiple locations, is also under review. Rather than concentrating stockpiles at a single base, this method distributes supplies across various sites such as ports, industrial complexes, and private facilities, allowing for alternative supply options in the event of logistics disruptions.

The completion date for the new domestic dedicated critical minerals stockpile facility has been delayed to 2028. This project, with a total budget of 24.17 billion won allocated over three years starting from 2024, will be constructed on a site of approximately 180,000 square meters (about 54,000 pyeong) within the Saemangeum National Industrial Complex, and will include eight general warehouses and four specialized warehouses.

However, the overall timeline has been delayed, with the design period extended from one year to two years. A government official stated, "There is a consensus on the need to expand stockpiles, especially in light of the Middle East crisis," but added, "Since minerals are more sensitive than oil or gas, we are strategically evaluating the effectiveness of overseas joint stockpiling."

Experts also believe that such a shift to a "flexible stockpiling system" is inevitable. At the recent "Critical Minerals Supply Chain and Stockpiling System Advancement" roundtable hosted by the National Assembly Research Service, Kim Yoojeong, Senior Researcher at the Korea Institute of Geoscience and Mineral Resources, stated, "Roles in the critical minerals supply chain are differentiated by country, so a risk diversification strategy is essential." Kim Sujeong, Assistant Legislative Investigator at the National Assembly Research Service, added, "Overseas resource development, cooperation with allied nations, and fostering the resource recycling industry should be pursued in parallel."

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