Recent reports indicate that China is encouraging South Korea to reconsider its export of products containing rare earth minerals to U.S. defense companies.
These minerals—dysprosium, terbium, and yttrium—are the essential components driving the capabilities of missiles, fighter jets, and radar systems, and China is tightening its grip on their supply.
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South Korea, a crucial player in this high-stakes arena, finds itself in a precarious position, balancing its alliance with the U.S. against the formidable economic power of its neighbor.
According to reports from the Korea Economic Daily, Beijing has communicated with South Korean companies involved in the production of power transformers, batteries, displays, electric vehicles, and aerospace equipment.
The communication includes a caution regarding potential sanctions should these companies continue to supply the U.S. military. Notably, China, which processes a significant portion of the world’s rare earth materials, appears to be taking a firm stance in this matter.
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This development represents a new phase in China’s trade dynamics with the United States, following the imposition of substantial tariffs during the previous administration.
South Korea is currently facing significant challenges. Its economy, which is largely driven by exports, depends heavily on certain minerals.
A complete cessation of supplies from China could significantly impact its defense and technology sectors. While Seoul does have stockpiles of some rare earths, such as dysprosium, sufficient for approximately six months, this is only a temporary solution.
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South Korea’s approach to rare earth minerals is quite different from simply exporting raw materials. Instead, the country focuses on providing processed products, such as power transformers, batteries, displays, magnets, and aerospace components, which rely on rare earth elements sourced from China.
