Seoul: The government on Friday unveiled a plan to promote recycling of critical minerals by easing regulations and expanding financial and tax incentives, as part of its wider goal to stabilize supply chains, the industry ministry said. The measures were announced during a supply chain meeting chaired by Finance Minister Koo Yun-cheol, amid rising global uncertainty in raw material supply chains due to rising tech rivalry and escalating geopolitical tensions, the ministry said.
According to Yonhap News Agency, Finance Minister Koo Yun-cheol remarked that the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju marked a significant turning point amid ongoing global economic uncertainty. The government anticipates that the summit's outcomes will positively contribute to South Korea's supply chain stability. Critical mineral recycling involves reprocessing materials recovered from waste to produce essential minerals for advanced industries.
The domestic critical mineral recycling market is projected to expand from 6.7 trillion won (US$4.7 billion) in 2024 to 21.1 trillion won by 2040. Despite this growth potential, high technological and capital barriers have hindered private sector expansion, with many companies lacking the resources for new investments, officials said. The government aims to raise the recycling rate of 10 strategic critical minerals to 20 percent by 2030 through regulatory reforms and industry support.
As part of these efforts, the government plans to reduce tariffs, considering global rates. Currently, major economies such as Japan, the United States, and the European Union apply zero tariffs to key materials used in critical mineral recycling. The government will also establish a joint council comprised of representatives from both the public and private sectors to identify promising recycling projects and provide direct investment through a supply chain stabilization fund.
Additionally, the government plans to ease regulations on recycling material distribution by classifying some materials as "recyclable resources" rather than waste, reducing restrictions on transport and storage. Separately, the government will operate a response team to support the supply of rare earth elements. Initiatives will include promoting investment in overseas resource development, developing technologies to reduce rare earth use, and expanding public reserves.
The plan follows China's announcement of tighter export restrictions on critical minerals, a move that has raised concerns over stable supplies for advanced industries such as semiconductors and electric vehicles, South Korea's key export items. In a positive development, U.S. President Donald Trump and Chinese President Xi Jinping reached an agreement during their summit in South Korea on Thursday to remove restrictions on exports of Chinese rare earths.