Korea-Vietnam Join Hands on Critical Minerals Supply Chain and Carbon Neutrality

Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy attended the meeting of the Special Committee for Supporting the 2030 Busan World Expo held at the National Assembly on the 26th and delivered an opening remark. Photo by Yoon Dong-joo doso7@

[Asia Economy Sejong=Reporter Dongwoo Lee] Our government has decided to strengthen cooperation with Vietnam on critical mineral supply chains and ammonia co-firing power generation technology development, taking advantage of the visit of Nguyen Xuan Phuc, President of Vietnam.

On the 5th, Lee Chang-yang, Minister of Trade, Industry and Energy, signed a total of three agreements and memorandums of understanding (MOUs) with Nguyen Hong Dien, Minister of Industry and Trade of Vietnam, at the signing ceremony held after the summit between President Yoon Suk-yeol and President Phuc.

The two countries agreed to cooperate in securing exploration and development technologies for critical minerals and promoting investments for stable supply. In addition, they decided to expand cooperation in areas such as greenhouse gas reduction and clean energy, industrial supply chains through origin cumulation, carbon neutrality, and trade facilitation.

Minister Lee proposed strengthening supply chain cooperation for critical minerals, including rare earth elements, during a meeting with the Vietnamese Minister of Industry and Trade in August, and has been continuously discussing cooperation plans through dispatching working-level investigation teams.

Through this, the government expects to create synergy with Vietnam based on South Korea’s critical mineral mining and refining technologies. Vietnam, a resource-rich country with abundant mineral resources such as rare earths and tungsten, is expected to have great potential for cooperation with South Korea’s critical mineral mining and refining technologies.

Furthermore, the two ministers agreed to add ammonia co-firing technology development to the power industry cooperation MOU signed in 2018 and include offshore wind power in the renewable energy cooperation to jointly strive for achieving carbon neutrality. They also signed an 'Exchange of Letters for the Implementation of the UK-Vietnam Origin Cumulation Clause,' which applies preferential tariffs when exporting garments made by processing Korean fabrics in Vietnam to the United Kingdom.

The existing free trade agreement (FTA) between the UK and Vietnam has applied preferential tariffs only to garments processed using Vietnamese yarn and fabric. Through this, the government expects that South Korea’s fabric exports to Vietnam, which amounted to $931 million last year, will further expand.

Both sides agreed to guarantee the implementation of the origin cumulation clause through the signing of the exchange of letters and to provide necessary administrative cooperation to the UK side. They also plan to promptly notify the UK to ensure that preferential tariffs are applied when exporting garments processed with Korean fabrics in Vietnam to the UK.