Defining Strategic Minerals and Their Pivotal Role in Modern Technology

Rare earth elements (REEs) and strategic minerals are the “new vascular system” of 21st-century industry. The advancement of electric vehicles, semiconductors, wind energy, and defense technologies all culminates in the use of these essential elements.

Together with the 17 lanthanide series elements, materials such as lithium, cobalt, nickel, and tungsten have become indispensable to cutting-edge technologies. They have evolved from mere raw materials into assets of national security. Accordingly, each country must clearly analyze how these resources are mined, who drives the demand, and what strategies are deployed amidst escalating geopolitical tensions.

China controls over 50% of the world’s rare earth ore production and 87% of the refining processes, effectively dominating the entire rare earth supply chain. Since the 1990s, state-led resource strategies and infrastructure investments have blocked access by global competitors and solidified a China-centric structure. As a result, countries like the U.S., EU, and Japan have lost technical and economic independence in the rare earth market.

Heavy rare earths such as neodymium, dysprosium, and praseodymium are essential for high-performance motors and permanent magnets. Global demand for these resources is expected to increase 6 to 40 times by 2040 in pursuit of carbon neutrality. Efforts to close this gap inevitably expose cracks in both global geopolitics and environmental protection efforts.

The value of strategic minerals is measured by their hidden costs. In the Democratic Republic of the Congo, around 300,000 people mine cobalt—30,000 of whom are under 18—using bare hands for less than $2 a day. A joint study by the NIH and Harvard warns of widespread respiratory illness and lead poisoning among these workers. In Chile’s Atacama Desert, vast brine evaporation fields disrupt local ecosystems, and in Indonesia, nickel mining has led to marine pollution and deteriorating community health. It is undeniable that even “green technology” is built on these human and environmental sacrifices.

In 2018, the Trump administration imposed high tariffs on Chinese imports, prompting China to threaten restrictions on rare earth exports. This incident demonstrated that rare earths operate as a triple-leverage asset in economics, diplomacy, and security. An F-35 fighter jet requires approximately 420kg of rare earth elements, and critical military equipment cannot function without them.

In response, the U.S. introduced the Inflation Reduction Act (IRA) in 2022 and launched the Mineral Security Partnership (MSP), forming robust supply chain alliances with Europe and others. However, there is still no successful example of fully replacing China, and decoupling remains a distant challenge.

Although projects such as Mountain Pass in the U.S. are underway, the lack of refining technology remains a significant barrier. The EU established the Critical Raw Materials Act (CRMA), setting mining, processing, and recycling targets, but progress is slow due to environmental regulations and social opposition. Meanwhile, countries such as Australia (through the Eneabba and Nolans projects), Canada, Brazil, the UAE, Saudi Arabia, Vietnam, and Indonesia are emerging as diversification keys. Yet each faces the challenge of refining capacity and technological independence.

Japan and parts of Europe are focusing on urban mining and recycling technologies to establish resource circulation systems that stabilize supply and meet ESG standards simultaneously.

South Korea imports 8 to 9 out of 10 core strategic minerals—including rare earths, lithium, and nickel—from China. In response, the government has launched a “Core Minerals Procurement Strategy,” with companies like POSCO, LG, and SK securing mining shares in Australia, Argentina, and Indonesia. However, domestic refining facilities remain lacking.

Korea’s current model aligns with the U.S.-Japan-led supply chain alliance, which may offer short-term stability but has limitations in building an independent ecosystem. A “full-process strategy” that strengthens refining technologies, recycling systems, and environmental safety capabilities is increasingly vital.

Following his reelection in 2025, Trump has aggressively ramped up his rare earth strategy:

Expanded Section 232 Investigations: By executive order, strategic mineral imports are now subject to national security assessments.

Use of DPA and Supply Stabilization: The Department of Defense and Department of Energy are investing federal funds in domestic rare earth projects, accelerating facility construction and research.

Renewed Talks with China: Trump claims to have secured a promise from Xi Jinping to resume rare earth and magnet exports to the U.S. in exchange for maintaining a 55% tariff.

Public-Private Investment Acceleration: The Department of Defense recently acquired a 15% stake in MP Materials and announced plans to complete magnet facilities in Fort Worth, Texas by 2028.

These strategies signal a clear push toward “domestic self-sufficiency,” confirming that the Trump administration considers rare earths a triple strategic asset—economic, diplomatic, and security-related.

The modern strategic minerals market is no longer a race over sheer volume. Ethical sourcing and transparency have become critical benchmarks. The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) mandates environmental and human rights accountability across supply chains, while the U.S. applies Dodd-Frank and IRA laws to enhance traceability and incentivize investment. Consumers are now asking not just what a product is but how and where it was made.

These standards will increasingly influence how Korean companies procure resources. In the future, moral legitimacy will be a key competitive factor in global resource sourcing.

The year 2025 marks a tipping point in the rare earth market. A comprehensive strategy that integrates technological independence, ethical and environmental compliance, and supply chain transparency is now required. Post-reelection, Trump’s policies are being reshaped into a national agenda interweaving public sentiment, economic logic, and security imperatives.

The global rare earth market is no longer about “where to mine” but rather about who manages and distributes these resources—and under what conditions. South Korea must now determine how it will rise as a trusted supply chain partner under this new paradigm through collaboration and technological investment.

Starting in 2025, the strategic minerals market has entered a new phase. Over the next decade, its evolution will not simply hinge on growing demand but will be shaped by geopolitical conflict, technological advancement, policy shifts, and reinforced ethical standards. The following four scenarios outline possible futures:

Technology-Driven Optimism Scenario: The U.S., EU, and Japan accelerate technological independence, and the commercialization of recycling and alternative materials significantly reduces dependence on China. For example, lithium iron phosphate (LFP) or solid-state batteries that drastically reduce rare earth use could alter demand structures. Urban mining, AI-based mineral tracking, and ESG blockchain certification may become standard practice.

Geopolitical Escalation Scenario: U.S.-China tensions deepen, and China weaponizes its strategic mineral exports, causing repeated global supply chain disruptions. With Trump’s reelection, the 55% tariff on Chinese rare earths remains in place, and China may retaliate with partial export restrictions. Prices surge, and rare earths take on even greater strategic military importance. Nations expand their stockpiling systems as rare earths become a tool of diplomatic leverage.

ESG-Centric Transition Scenario: Transparency and ethical mining become codified in international trade norms. Only certified supply chains are accepted in global markets. The China-centric, low-cost, low-environmental-compliance model declines, while North America, the EU, and Australia emerge as trustworthy sources. Ethical mining certification, mandatory human rights reporting, and third-party audits become prerequisites for resource access.

Hybrid Transitional Realism Scenario: Technological innovation, geopolitical friction, and ESG norms operate simultaneously, producing varied outcomes across regions and industries. For example, lithium may see widespread recycling while some minerals remain tied to the Chinese supply chain. Global companies deploy multi-layered strategies, and nations operate dual or triple supply chains in parallel. In this scenario, resource diplomacy, innovation, and policy coordination speed and balance will determine success.

The future of strategic minerals is unlikely to follow a single trajectory. Governments and businesses must prepare for multiple futures, navigating uncertainty with agility. The rare earth conflict is far from over—it is only entering its second act.