As China tightens its grip on critical mineral exports, South Korea is eyeing Mongolia as an alternative supplier — though its distribution networks, hemmed in by China and Russia, carry the risk of political interference by the two regional heavyweights down the road.

The potential for tension could grow if South Korea ultimately funnels those minerals toward the United States under the two countries' ever-expanding mineral supply chain alliance. South Korea currently chairs a 17-nation coalition that Washington launched to reduce the world's reliance on China for critical minerals.

The presidents of South Korea and Mongolia concluded a Comprehensive Economic Partnership Agreement on July 11, eliminating tariffs of 2 to 5 percent that had been imposed on Mongolian copper, molybdenum and rare earth elements. Since December, the two countries have been running a joint research center to pursue collaborative research and seek methods for exporting. 
The pact reflects Seoul's broader efforts to find alternatives to China as Beijing tightens export controls on critical minerals, particularly rare earths. China currently controls roughly 59 percent of global rare earth mining and about 90 percent of refining and processing capacity. 

Rare earths — so named not for scarcity in the earth's crust, but for how difficult they are to isolate from the minerals containing them — are often called the “vitamins of advanced manufacturing,” since only small quantities are needed to make the permanent magnets essential to industries including EVs, chips, defense, robotics and drones.

Under the shadow of Beijing and Moscow
As a landlocked country, up to 90 percent of Mongolian exports, including minerals, must pass through either Russian or Chinese rail lines and ports in order to reach world markets.

That dependency leaves Mongolia's exports exposed to interference; If China and Russia recognize that minerals moving through South Korea are ultimately bound for the United States or Japan, experts warn that they could delay shipments or throw up obstacles along the route to slow them down.

“If China wanted to counter the United States, it could sharply raise customs costs or simply slow things down at the border,” said Jang Jae-hyuk, a professor in the Department of Mongolian Studies at Hankuk University of Foreign Studies. “For now, there's no way around that logistics bottleneck.” 

South Korea is considering building processing facilities directly in Mongolia and flying the finished materials home by air, which is being explored by the research center that opened late last year.

“Critical minerals like tungsten, molybdenum and rare earths can be processed locally into concentrates or intermediate materials through beneficiation or smelting, which makes transport far more efficient,” said Song Byeong-gu, chairman of the Korean Association of Mongolian Studies, who also teaches Mongolian studies at Dankook University.

“In fact, tons of Mongolian tungsten concentrate were flown into South Korea for the first time on June 27,” he said. “That shows there's real room to diversify how some critical minerals are transported.”

A mineral-rich, unmapped nation 
Mongolia ranks 10th among the world's mineral-rich nations, according to the U.S. Geological Survey, and more than 80 minerals including rare earths, copper, gold and uranium have been officially surveyed and confirmed within its borders.

Mongolia has registered six rare earth deposits and 26 known occurrence sites, giving it the world's second-largest rare earth reserves after China, at roughly 16 percent of the global total, or 31 million tons. Its copper reserves, at 55 million tons, rank second worldwide, and its coal reserves of 175 billion tons at fourth. 

Mongolia's territory is roughly 16 times the size of South Korea, and the reserve estimates now in circulation are based solely on the portions of that land that have undergone detailed surveys. Some 55 percent of Mongolian territory remains unexplored.

Mongolia is also home to Oyu Tolgoi, one of the largest copper and gold mines in the world, in the Gobi Desert located in the southern region of the country. Mongolia's Mineral Resources and Petroleum Authority estimates the site holds 45 million tons of copper and 15 million tons of gold.

The mining sector dominates Mongolia's economy; as of 2024, it accounted for 27 percent of GDP, 70.9 percent of industrial output and 87.2 percent of total exports.

Washington in the background
Experts say the South Korea-Mongolia partnership is, at its core, a channel for funneling minerals toward the United States — an outgrowth of a broader South Korea-U.S. mineral alliance aimed at breaking China's grip on the sector. 

Washington launched the Forum on Resource Geostrategic Engagement, or Forge, in February — a 17-nation coalition to secure and diversify global supply chains for critical minerals — and South Korea currently serves as its chair.

“On paper, this is a South Korea-Mongolia minerals agreement, but in practice it's closer to an agreement between South Korea, the United States and Mongolia,” said Professor Jang. “A significant share of the minerals and rare earths flowing into South Korea will ultimately end up in the United States. If China recognizes that intent, some form of interference is possible.”

Roughly 70 percent of the rare earth compounds and metals imported by the United States between 2020 and 2023 came from China, according to the U.S. Geological Survey. Of the 17 rare earth elements, China's share of production for the permanent magnets containing neodymium and dysprosium reaches 94 percent.

Heavy rare earths such as samarium-cobalt are especially critical for defense platforms — missiles, fighter jets and other weapons systems — due to their high-temperature stability, corrosion resistance and durability. A single U.S. F-35 fighter jet requires roughly 50 pounds of samarium magnets, according to a report from The New York Times.

“Mongolia maintains diplomatic ties with both North and South Korea and has been designated a partner in the United States' Indo-Pacific strategy, which is why neighboring countries are increasingly focused on the strategic value Mongolia holds,” said Park Jeong-hu, a research fellow at the Institute for National Security Strategy. 

That alignment is already taking shape; the U.S. government has acquired a 10.59 percent stake in Korea Zinc, the world's largest zinc smelter. A joint venture between Korea Zinc and the U.S. government, in which Washington holds the largest share, is investing roughly $7.4 billion to build an integrated nonferrous metals and critical minerals smelter near Clarksville, Tennessee.

Korea Zinc said of the investment that it was reviewed “at the request of the U.S. government” as the country is “pursuing the restructuring of critical mineral supply chains as a national strategy.” 

LS Cable & System is in talks with the state of Virginia to establish a finished rare earth permanent magnet plant, with production expected to begin by late 2027, while Posco International has partnered with Indiana-based ReElement Technologies to build a joint rare earth separation and refining plant with an annual capacity of 3,000 tons. 

BY SARAH CHEA   [chea.sarah@joongang.co.kr]

Published Date:2026-07-20