South Korea’s rare earths, defence deals with Australia ‘not aimed at China’, analysts say
- President Moon has signed a string of deals in Australia, where he is on a state visit that local media have painted as being aimed at China
- But observers say the trip is more likely a chance for both to ‘rediscover the other as a partner of strategic significance’ amid climate change, a turbulent international order and global supply chain instability
A billion-dollar defence deal and an agreement for Australia to boost exports of rare earth minerals to South Korea are aimed at improving bilateral relations and are not “political statements” aimed at China.
That was the view of analysts as the Australian rare earth producer ASM agreed to increase exports to South Korea in the latest eye-catching deal to have emerged from South Korean President Moon Jae-in’s visit.
Rare earth minerals are vital to the production of high technology devices, including smartphones, batteries and some military weapons. Fears over the domination of their production by China – which refines 80-90 per cent of the world’s rare earths – has prompted some governments to find alternative supply chains for the minerals and to stockpile them, particularly after China threatened to stop exports to the United States amid the two countries’ trade war.
ASM on Tuesday announced to the Australian Securities Exchange that it had agreed with South Korean mining agency, the Korean Mine Rehabilitation and Resource Corporation (KOMIR), to expand the supply chain of rare earths to South Korea. KOMIR is responsible for national resource security, including developing overseas mining.
The announcement was the latest in a host of deals to have been struck during Moon’s trip. It follows the signing of a new Australia-South Korea “comprehensive strategic partnership”, a A$1 billion (US$712 million) purchase deal for South Korean weapons, and plans to boost cooperation on critical minerals and clean-energy trade.
While Australian media outlets have painted many of the agreements as being aimed at China, analysts said Moon’s trip – the first visit to Australia by a South Korean president in 12 years – was more about deepening Seoul’s relationship with Canberra as a partner in the region, and establishing diversified supply chains and new trade for South Korea.