Korea Customs Service trade statistics show rare earth oxide imports from the US reached $19.06 million in the first seven months of this year, already surpassing last year's full-year total of $11.56 million. The US share of total rare earth imports climbed to 21.2 percent from 9.7 percent a year earlier, as South Korea and the United States deepen resource ties in response to China's export controls.

A rare earth mineral mining site. [Reuters]
A rare earth mineral mining site. [Reuters]

The share of US-origin rare earths in South Korea's imports has more than doubled this year, some analysts say, as Seoul pursues rare earth diversification away from China as a core resource-security policy and Washington ramps up domestic production in response to China's export controls.

China's share edges down from 49.0% to 47.5%

According to Korea Customs Service trade statistics, South Korea imported $19.06 million worth of rare earth oxides — the basic processed form in which rare earths are traded — from the United States in the January–July period. That figure already exceeds last year's full-year total of $11.56 million in just over half a year.

The US share of total rare earth imports more than doubled over the same period. American-origin rare earths accounted for 21.2 percent of South Korea's total rare earth import bill of $89.53 million in the first seven months of this year, up sharply from 9.7 percent for all of last year.

At the same time, China's share — long dominant in South Korea's rare earth supply — edged lower. Chinese rare earths made up 47.5 percent of imports, or $43.91 million, through July, down from 49.0 percent, or $56.30 million, for all of last year. That represents a 1.5 percentage-point decline in share and a $12.39 million drop in import value.

China's export controls accelerate South Korea-US push to reduce rare earth dependence

A rare earth metal mining site. [Reuters]
A rare earth metal mining site. [Reuters]

The shift reflects overlapping strategic interests between South Korea and the United States in reducing rare earth dependence on China. After Beijing responded to US tariff pressure last year by imposing rare earth export controls, Washington began channeling serious investment into domestic rare earth producers.

Rare earths are critical materials for advanced industries including AI semiconductors, defense and electric vehicles, and their strategic importance has grown sharply in recent years. China dominates the global rare earth market and has shown willingness to wield that dominance as a strategic tool, pushing the United States to pursue supply chain self-sufficiency. South Korea, also caught in the ripple effects of China's export controls, joined the trend earlier this year by announcing a comprehensive rare earth supply chain strategy.

US rare earth policy is generating spillover benefits for South Korea. The Financial Times reported in July that rare earth oxides produced this year by US companies including MP Materials, Energy Fuels and Phoenix Tailings are being exported largely to South Korea and Japan.

US government support has rapidly expanded domestic rare earth production, but the industrial base needed to process those oxides into metals and then into finished products such as permanent magnets has yet to be fully developed, leaving much of the output headed overseas.

POSCO International, Korea Zinc among firms accelerating private-sector rare earth cooperation

Growing corporate cooperation between South Korean and US firms this year suggests the upward trend in American rare earth imports will continue for now. POSCO International has agreed to jointly invest $200 million with US rare earth startup REEtec to build a factory in the United States capable of producing 6,000 metric tons of rare earth oxides and permanent magnets annually, targeting mass production by 2028.

Korea Zinc also announced earlier this year a plan to build a rare earth oxide production plant with a capacity of 100 metric tons per year in partnership with US rare earth startup Alta Resource Technologies, targeting operation by 2027, with output to be scaled up in stages.

"Rare earth self-sufficiency is an urgent priority for both South Korea and the United States, and processing rare earths found in America right there on the ground is an efficient investment from South Korea's perspective as well," an industry official said. "As the ongoing cooperation between South Korean and US private-sector companies takes concrete shape, more follow-on cases will emerge."


klee@heraldcorp.com