[Report] "Stockpiling 180 Days' Worth of Rare Earths for Electric Vehicles... Responding to Mineral Supply Chain Crisis"

Korea Mine Reclamation Corporation Gunsan Stockpile Base
14 Rare Metals Including Chromium and Rare Earths
Stockpiled in 4 General and Special Warehouses

Experiencing Trade Conflicts and Supply Chain Crisis
Budget Increased This Year to Expand Purchases
Plan to Increase Lithium Stockpile to 30 Days Within the Year

The Korea Mine Reclamation Corporation's Gunsan Reserve Base, located in the Saemangeum Industrial Complex in Gunsan, Jeonbuk. On the 2nd, guided by an official, I entered a double-layered special warehouse where rare earth elements such as neodymium were neatly stacked inside large steel drums.

Neodymium is a raw material essential for permanent magnets used in electric vehicle motors, and South Korea is heavily dependent on China for it. The amount of neodymium stored here is enough for domestic automobile manufacturers to use for about 180 days.

Rare earth and other rare minerals are stored in the special warehouse of the Gunsan Stockpile Base managed by the Korea Mine Reclamation Corporation. Photo by Korea Mine Reclamation Corporation

Since 2011, the Korea Mine Reclamation Corporation has been leasing the Gunsan base site and buildings from the Public Procurement Service to stockpile critical minerals. Since last year, under the unified plan for rare mineral stockpiling, it has also taken on the stockpiling of lithium, cobalt, vanadium, silicon, and other minerals.

Rare metals refer to metals with low reserves, unevenly distributed in specific regions, and economically difficult to extract. The government has designated 35 types and 56 elements as rare metals. Currently, 19 types and 28 items are being stockpiled. This will be expanded to 20 types and 35 items in the future.

The Gunsan Reserve Base of the Korea Mine Reclamation Corporation stores 14 types of rare metals in two general warehouses and two special warehouses. Eight types, including chromium, molybdenum, niobium, cobalt, and titanium, are stored in the general warehouses, while six types, including rare earths, gallium, selenium, and antimony, are stored in the special warehouses. In case of a crisis in the mineral supply chain, these minerals will be lent (with physical return conditions) or released (cash sale) to private demand companies to provide support.

The appearance of magnesium ingots stored in the general warehouse of Gunsan Reserve Base, Korea Mine Reclamation Corporation. Photo by Korea Mine Reclamation Corporation

Upon entering the general warehouse, chromium stacked in ton bags (large sacks with a 1-ton capacity) immediately caught the eye. Chromium is the most abundantly stored mineral here, but it only amounts to a 47-day supply. Chromium is used in stainless alloy steel and special steel and is an indispensable core mineral for South Korea's steel industry.

Magnesium ingots (metal blocks) are also stored here. Magnesium was a mineral that experienced a supply shortage in 2021 when China controlled production. It is widely used in the automotive industry mixed with aluminum to increase strength. The Korea Mine Reclamation Corporation began stockpiling magnesium in 2022 and currently holds a 52-day supply.

Rare minerals stored in ton bags inside a general warehouse. Photo by Korea Mine Reclamation Corporation

The importance of stockpiling critical minerals has been growing amid trade conflicts between the U.S. and China and supply chain crises following COVID-19. South Korea is particularly vulnerable to geopolitical crises due to its high dependence on critical minerals from specific countries such as China. In contrast, the stockpile volume is woefully insufficient. As of the end of last year, the rare minerals stockpiled by the Korea Mine Reclamation Corporation amounted to an average of only 52 days' supply.

Fortunately, this year's budget has significantly increased, allowing for an expansion of stockpiles. The budget for rare metal stockpiling was only 48.791 billion KRW including supplementary budgets in 2022 and 37.232 billion KRW in 2023, but it surged by 577% to 251.761 billion KRW this year.

Of this, the new purchase budget is 20.253 billion KRW, a 716% increase compared to the previous year. The government aims to stockpile 100 to 180 days' worth of critical minerals by 2031, depending on the item. To achieve this, 1.1141 trillion KRW in funds is required.

The special warehouse at Gunsan Reserve Base of Korea Mine Reclamation Corporation. Built with explosion-proof and seismic design. Photo by Korea Mine Reclamation Corporation

The Korea Mine Reclamation Corporation plans to mainly use this year's increased budget to purchase lithium, gallium, and rare earth elements. Currently, the amount of lithium stored by the Public Procurement Service is only enough for 5.8 days.

Jung Nam-sik, the head of the stockpile management team at the Korea Mine Reclamation Corporation, explained, "We are currently purchasing lithium through bidding and plan to stockpile a 30-day supply within this year." About 90% of lithium carbonate and lithium hydroxide, key raw materials for lithium-ion batteries, are imported from China. Gallium, which China controlled exports of last year, is currently stockpiled for 40 days, with plans to expand to 100 days within the year.

The government plans to build a national critical minerals reserve base in Saemangeum to accommodate the increasing stockpile of critical minerals. To this end, the Ministry of Trade, Industry and Energy and the Korea Mine Reclamation Corporation signed a land purchase contract for the Saemangeum Industrial Complex with the Korea Rural Community Corporation in March.

The area around the Saemangeum Industrial Complex where the National Strategic Mineral Stockpile Base will be established. 2025.5.2. Photo by Kang Hee-jong

The Korea Mine Reclamation Corporation plans to complete the base design in the second half of this year and start construction in the first half of next year. Team leader Jung Nam-sik said, "The new reserve base is scheduled to be completed by the end of 2026, but some warehouses will be completed and used by the end of 2025."

The new reserve base will be built on a 179,000㎡ site with a total floor area of 111,697㎡. The site is currently 1.3 times larger and the building 3.3 times larger than the Gunsan Reserve Base. Once the new critical minerals reserve base is completed, it is expected to enable a swift response to mineral crises.