A Comprehensive Economic Partnership Agreement signed in recent weeks removes tariffs. Meanwhile, since last December, a joint research centre has been studying mineral resources and developing export routes. However, the issue of dependence on Russia and China for rail networks and ports remains.

The MongolianNews website raises the question of whether Seoul’s interest in Mongolia’s mineral resources risks turning into a geopolitical game between China, Russia and the United States.

Experts argue that the rare-earths agreement between Mongolia and South Korea is in fact a covert deal between Ulaanbaatar and Washington. South Korea’s attempt to develop Mongolia’s vast reserves of critical raw materials aims to reduce its dependence on Beijing, but the logistics routes that pass exclusively through China and Russia make this strategy highly vulnerable to external pressure.

“As China tightens its grip on exports of critical minerals, South Korea is looking to Mongolia as an alternative supplier. However, its distribution networks are constrained by China and Russia, which poses long-term risks of political interference from these regional giants,” notes Sarah Cheah, business correspondent for the Korea JoongAng Daily.

Tensions could rise if South Korea were to start redirecting these minerals to the United States, as part of a growing bilateral alliance to ensure supply chain security. Seoul currently leads a coalition of 17 nations, spearheaded by Washington, to reduce global dependence on China for critical minerals.

On 11 July, the presidents of South Korea and Mongolia signed a Comprehensive Economic Partnership Agreement, which removes tariffs (previously ranging from 2 per cent to 5 per cent) on imports of copper, molybdenum and rare-earth elements from Mongolia.

Furthermore, since December last year, a joint research centre has been operating in both countries, studying mineral resources and developing export routes. Rare-earth elements are often referred to as the ‘vitamins of the high-tech industry’; their name does not derive from their physical scarcity in the Earth’s crust, but rather from the extreme difficulty of extracting and separating them from minerals.

Microscopic amounts of rare-earth elements are crucial for the production of permanent magnets, which are essential for the manufacture of electric vehicles, microchips, defence products, robotics and drones.

As a landlocked country, Mongolia is forced to transport up to 90 per cent of its exports, including minerals, via Russian or Chinese rail networks and seaports. This total dependence on transit routes makes Mongolian supplies extremely vulnerable: “If China were to enter into direct conflict with the United States, it would simply need to drastically increase customs duties or slow down the clearance of goods at the border,” notes Chang Jae-hyuk, a professor in the Department of Mongolian Studies at Hankuk University of Foreign Studies.

Alternatively, South Korea is considering the possibility of building processing plants directly in Mongolia, and then exporting the finished, high-value materials by air. Assessing the feasibility of this scenario is currently one of the main objectives of a joint research centre inaugurated at the end of last year.

“Critically important minerals such as tungsten, molybdenum and rare-earth elements can be processed directly on site to produce concentrates or intermediate products. Enriching and smelting raw materials within the country would drastically improve logistical efficiency,” says Son Byung-gu, president of the Korean Association of Mongolian Studies and a professor at Dankook University.

According to the US Geological Survey, Mongolia ranks among the top ten countries in the world for mineral resources, and its subsoil has been officially confirmed to contain over 80 types of minerals, including rare-earth elements, copper, gold and uranium.

By Vladimir Rozanskij

Published Date:2026-07-31