[Mineral Industry War]④ Korea’s Survival Strategy Without Mines: Securing Supply With Raw Material Networks and Refining Technology

POSCO Focuses on Lithium Investments

LS MnM: Indonesian Raw Materials Processed in Onsan

Korea Zinc Expands US Mining and Integrated Smelting

Core Strategies: Raw Material Networks and Refining Technology

Editor's NoteThe global race for critical minerals is intensifying. Minerals essential for future industries—such as electric vehicles, semiconductors, robotics, wind power, and defense—are no longer just basic raw materials but have become strategic assets that determine industrial competitiveness and national security. Countries are reorganizing their supply chains—from securing mines, smelting, refining, material production, to recycling—around their own interests, effectively engaging in a 'mineral war.' Especially as China controls the supply chains for rare earth permanent magnets, lithium, nickel, graphite, and other key minerals, the United States, Europe, Japan, and others are accelerating the establishment of supply chains centered on production bases outside of China and allied nations. Korean companies, too, are expanding their business domains from securing overseas resources to processing, refining, material production, and recycling, in a bid for survival. The Asia Business Daily presents a five-part series examining the competition among major nations over critical mineral supply chains, the response of domestic companies, and the survival strategy of Korea—a country lacking natural resources.

The supply chain issues revealed in rare earth elements are being repeated with other critical minerals. Minerals such as lithium, nickel, copper, and germanium, which are needed for advanced industries, also have their mining and smelting/refining stages concentrated in a handful of countries. For Korea, which lacks significant domestic mineral resources, the ability to stably secure overseas raw materials and process them into high-value-added materials is a core competitive advantage.

According to the International Energy Agency (IEA)'s "Global Critical Minerals Outlook 2026" released this year, copper and zinc smelters could become key supply chain hubs by recovering strategic by-product minerals. Korean companies are also expanding their critical minerals businesses by leveraging their existing raw material procurement networks and smelting technologies.

Jeong Sucheol, head of the Mineral Exploration and Development Research Center at the Korea Institute of Geoscience and Mineral Resources, commented, "There are many types of critical minerals, and since each mineral has a complex value chain, it is impossible to secure every single item. It is more realistic to select and focus on those minerals that are strategically important for domestic industries and supply chains."

Korea without Mines: Competing through Raw Material Networks and Smelting Technologies

POSCO Group, LS MnM, and Korea Zinc are each leveraging their own strengths to secure critical mineral supply chains.

POSCO Group is shifting its main critical minerals investments toward lithium, setting out the most specific production and investment targets for this strategic resource.

Lithium is being developed around two pillars: brine from Argentina and ore from Australia. The aim is to build an annual production capacity of 173,000 tons by 2033 and to enter the global top five in market share. By 2035, POSCO Group targets over KRW 1.8 trillion (1.8 trillion won) in operating profit from its lithium business. Of this, brine lithium accounts for 100,000 tons per year.

Lithium from ore will be produced at a rate of 73,000 tons annually. This includes the existing 43,000 tons from POSCO Pilbara Lithium Solution and a new smelting project utilizing concentrate from Australia's Mineral Resources, adding another 30,000 tons.

In the United States, POSCO Group is pursuing the establishment of a joint venture for rare earth element separation and refining, and in Brazil, it is in discussions regarding raw material procurement and equity investment.

LS MnM Onsan Nickel Sulfate Plant. LS MnM

LS MnM is extending its 90 years of non-ferrous metal smelting expertise and raw material procurement networks into nickel and battery materials. The company has invested in Indonesia's nickel smelter, PT Teluk Metal Industry (PT TMI), and secured preferential purchasing rights for nickel intermediate products, especially mixed hydroxide precipitate (MHP). This is processed into nickel sulfate at Ulsan, which is then converted into precursors and cathode materials—creating a supply chain of "Indonesian raw materials → Ulsan nickel sulfate → precursor → cathode materials."

LS MnM has also established a strong resource procurement base for its copper business through long-term contracts. In 2024, it signed a five-year contract with global mining company BHP to purchase a total of 1.73 million tons of copper concentrate, accounting for about 20% of LS MnM's total copper concentrate procurement, or about 350,000 tons annually.

LS MnM is now applying this procurement capability to its nickel business. The MHP secured from the Indonesian smelter is processed into nickel sulfate at the Onsan plant in Ulsan. With an annual production capacity equivalent to 24,000 tons of nickel metal, mass production is set to begin in December. The nickel sulfate proceeds to precursor production by LS-L&F Battery Solution (LLBS), and is then supplied to the cathode materials supply chain.

Image created by ChatGPT

Korea Zinc uses its complex smelting technology to extract multiple critical minerals from limited raw materials. It simultaneously recovers metals, including those contained in concentrate and smelting byproducts, and converts them into high-value-added materials such as germanium and indium.

In Tennessee, United States, "Project Crucible" is underway as Korea Zinc secures mines and smelters, establishing a domestic U.S. supply chain from mining to refining.

At the integrated smelter, Korea Zinc plans to produce 13 types of metals—including non-ferrous metals such as zinc, lead, and copper, as well as precious metals like gold and silver, and specialty metals like germanium and gallium—along with sulfuric acid for semiconductors. Of these, 11 are designated by the U.S. government as critical minerals. Permitting for construction is underway, with the goal of phased test runs of major processes starting in 2029 and full-scale operation in the first quarter of 2030.

Raw materials will be secured not only from the acquired Tennessee mines but also through external procurement and recycling. Zinc is procured from the United States and Mexico, lead from Mexico, Peru, and the U.S., and secondary raw materials like copper scrap will be imported from the Americas and Europe. Secondary raw materials and smelting byproducts from Pedal Point, a U.S. resource recycling affiliate, will also be used.

In Korea, an all-in-one nickel smelter is being built with the goal of starting commercial operation in early 2027. According to current plans, this facility will be able to produce about 42,600 tons of nickel for secondary batteries annually, based on nickel metal content.

Even with Higher Costs, Supply Chains Must Expand

Diversifying supply chains involves increased costs. According to the IEA, refining projects outside of dominant supplier countries require capital expenditures that are 20% to over 150% higher, and operating costs average approximately 50% higher than those of existing suppliers.

However, if Korea were to continue relying on a single country for critical minerals, the moment supplies are cut off, the production of domestic advanced industries—batteries, semiconductors, and defense—would inevitably be disrupted. This is why it is crucial to secure raw materials and processing capabilities, even at greater expense.

Center Director Jeong explained, "In the past, battery minerals such as nickel, lithium, and graphite were central, but as the importance of economic security, AI, semiconductors, and defense grows, there is increasing interest in a wider array of minerals, such as rare earth elements and tungsten."

Companies are also expanding their upstream supply chains through overseas mine and salt lake equity investments and long-term contracts. However, as resource development takes substantial time from exploration to production, it is pointed out that the search for new supply sources must continue.

Center Director Jeong added, "It takes a considerable amount of time to progress from the exploration stage through development and production to actual connection to the supply chain, making it difficult for companies to participate from the earliest stages. Although it is important to secure final products or raw materials in response to immediate supply chain risks, in the long term, ongoing exploration and pioneering for new sources of supply must continue."

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