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  • S.Korean tungsten mine will get $100 million makeover
  • Dozens of latest mineral initiatives launched globally
  • Inexperienced, digital booms gasoline demand for uncommon minerals
  • China is pre-eminent in crucial minerals provide
  • GRAPHIC-S.Korea’s reliance on China:

SANGDONG, South Korea, Could 9 (Reuters) – Blue tungsten winking from the partitions of deserted mine shafts, in a city that is seen higher days, might be a catalyst for South Korea’s bid to interrupt China’s dominance of crucial minerals and stake its declare to the uncooked supplies of the longer term.

The mine in Sangdong, 180 km southeast of Seoul, is being introduced again from the useless to extract the uncommon steel that is discovered contemporary worth within the digital age in applied sciences starting from telephones and chips to electrical autos and missiles.

“Why reopen it now after 30 years? As a result of it means sovereignty over pure assets,” mentioned Lee Dong-seob, vp of mine proprietor Almonty Korea Tungsten Corp.

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“Assets have turn out to be weapons and strategic belongings.”

Sangdong is one in every of at the least 30 crucial mineral mines or processing crops globally which were launched or reopened exterior China over the past 4 years, in accordance with a Reuters evaluation of initiatives introduced by governments and corporations. These embody initiatives creating lithium in Australia, uncommon earths in the US and tungsten in Britain.

The size of the plans illustrates the strain felt by nations internationally to safe provides of crucial minerals thought to be important for the inexperienced vitality transition, from lithium in EV batteries to magnesium in laptops and neodymium present in wind generators.

Total demand for such uncommon minerals is anticipated to extend four-fold by 2040, the Worldwide Power Company mentioned final yr. For these utilized in electrical autos and battery storage, demand is projected to develop 30-fold, it added.

Many nations view their minerals drive as a matter of nationwide safety as a result of China controls the mining, processing or refining of many of those assets.

The Asian powerhouse is the most important provider of crucial minerals to the US and Europe, in accordance with a examine by the China Geological Survey in 2019. Of the 35 minerals the US has labeled as crucial, China is the most important provider of 13, together with uncommon earth components important for clean-energy applied sciences, the examine discovered. China is the most important supply of 21 key minerals for the European Union, comparable to antimony utilized in batteries, it mentioned.

“Within the crucial uncooked materials restaurant, China is sitting consuming its dessert, and the remainder of the world is within the taxi studying the menu,” mentioned Julian Kettle, senior vp for metals and mining at consultancy Wooden MacKenzie.

The stakes are significantly excessive for South Korea, dwelling of main chipmakers like Samsung Electronics. The nation is the world’s largest shopper of tungsten per capita and depends on China for 95% of its imports of the steel, which is prized for its unrivalled energy and its resistance to warmth.

China controls over 80% of world tungsten provides, in accordance with CRU Group, London-based commodity analysts.

The mine at Sangdong, a as soon as bustling city of 30,000 residents that is now dwelling to simply 1,000, holds one of many world’s largest tungsten deposits and will produce 10% of world provide when it opens subsequent yr, in accordance with its proprietor.

Lewis Black, CEO of Almonty Korea’s Canadian-based dad or mum Almonty Industries, informed Reuters that it deliberate to supply about half of the operation’s processed output to the home market in South Korea as an alternative choice to Chinese language provide.

“It is simple to purchase from China and China is the most important buying and selling accomplice of South Korea however they know they’re over-dependent,” Black mentioned. “It’s a must to have a plan B proper now.”

Sangdong’s tungsten, found in 1916 throughout the Japanese colonial period, was as soon as a spine of the South Korean financial system, accounting for 70% of the nation’s export earnings within the Nineteen Sixties when it was largely utilized in metal-cutting instruments.

The mine was closed in 1994 because of cheaper provide of the mineral from China, which made it commercially unviable, however now Almonty is betting that demand, and costs will proceed to rise pushed by the digital and inexperienced revolutions in addition to a rising want by nations to diversify their provide sources.

European costs of 88.5% minimal paratungstate – the important thing uncooked materials ingredient in tungsten merchandise – are buying and selling round $346 per tonne, up greater than 25% from a yr in the past and near their highest ranges in 5 years, in accordance with pricing company Asian Steel.

The Sangdong mine is being modernised, with huge tunnels being dug underground, whereas work has additionally began on a tungsten crushing and grinding plant.

“We must always hold operating this sort of mine in order that new applied sciences might be handed over to the following generations,” mentioned Kang Dong-hoon, a supervisor in Sangdong, the place a “Pleasure of Korea” signal is displayed on a wall of the mine workplace.

“Now we have been misplaced within the mining trade for 30 years. If we lose this opportunity, then there can be no extra.”

Almonty Industries has signed a 15-year deal to promote tungsten to Pennsylvania-based World Tungsten & Powders, a provider to the U.S. army, which variously makes use of the steel in artillery shell ideas, rockets and satellite tv for pc antennae.

But there aren’t any ensures of long-term success for the mining group, which is investing about $100 million within the Sangdong challenge. Such ventures should battle to compete with China and there are considerations amongst some trade specialists that developed nations won’t observe by means of on commitments to diversify provide chains for crucial minerals.

Seoul arrange an Financial Safety Key Objects Taskforce after a provide disaster final November when Beijing tightened exports of urea resolution, which many South Korean diesel autos are required by legislation to make use of to chop emissions. Practically 97% of South Korea’s urea got here from China on the time and shortages prompted panic-buying at filling stations throughout the nation.

The Korean Mine Rehabilitation and Assets Company (KOMIR), a authorities company liable for nationwide useful resource safety, informed Reuters it had dedicated to subsidise about 37% of Sangdong’s tunnelling prices and would take into account additional assist to mitigate any potential environmental harm.

Incoming President Yoon Seok-yeol pledged in January to cut back mineral dependence on “a sure nation”, and final month introduced a brand new useful resource technique that may enable the federal government to share stockpiling data with the non-public sector.

South Korea shouldn’t be alone.

The USA, European Union and Japan have all launched or up to date nationwide crucial mineral provide methods over the past two years, laying out broad plans to spend money on extra diversified provide strains to cut back their reliance on China.

Mineral provide chains have additionally turn out to be a function of diplomatic missions.

Final yr, Canada and the European Union launched a strategic partnership on uncooked supplies to cut back dependence on China, whereas South Korea not too long ago signed collaboration offers with Australia and Indonesia on mineral provide chains.

“Provide-chain diplomacy can be prioritised by many governments within the coming years as accessing crucial uncooked supplies for the inexperienced and digital transition has turn out to be a prime precedence,” mentioned Henning Gloystein, director of vitality and local weather assets on the Eurasia Group consultancy.

In November, China’s prime financial planner mentioned it will step up exploration of strategic mineral assets together with uncommon earths, tungsten and copper.

Funding globally of $200 billion in extra mining and smelter capability is required to satisfy crucial mineral provide demand by 2030, 10 occasions what’s being dedicated presently, Kettle mentioned.

But initiatives have confronted resistance from communities who do not desire a mine or smelter close to their houses.

In January, for instance, strain from environmentalists prompted Serbia to revoke Rio Tinto’s lithium exploration licence whereas U.S. President Joe Biden’s administration cancelled two leases for Antofagasta’s copper and nickel mines in Minnesota. learn extra

In Sangdong, some residents are uncertain that the mine will enhance their lives.

“Many people on this city didn’t imagine the mine would actually come again,” mentioned Kim Kwang-gil, 75, who for many years lived off the tungsten he panned from a stream flowing down from the mine when it operated.

“The mine would not want as many individuals as earlier than, as a result of the whole lot is completed by machines.”

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Reporting by Ju-min Park and Joe Brock; Extra reporting by Beijing Newsroom and Gavin Maguire; Modifying by Kevin Krolicki and Pravin Char

Our Requirements: The Thomson Reuters Belief Rules.

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