Seoul, Oct 31 (NationPress) The South Korean government on Friday introduced a comprehensive strategy aimed at promoting the recycling of critical minerals by relaxing regulations and increasing financial and tax incentives. This initiative forms part of the larger objective to ensure supply chain stability, according to the industry ministry.

The announcement was made during a supply chain meeting led by Finance Minister Koo Yun-cheol, in light of growing global uncertainty in raw material supply chains prompted by intensifying tech competition and geopolitical tensions, as reported by Yonhap news agency.

"The Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju represents a pivotal moment amidst ongoing global economic instability," Koo remarked, expressing optimism that the outcomes would substantially contribute to South Korea's supply chain security.

Recycling critical minerals involves reprocessing materials retrieved from waste to generate essential minerals for advanced industries.

The domestic market for critical mineral recycling is projected to grow from 6.7 trillion won (approximately $4.7 billion) in 2024 to 21.1 trillion won by 2040.

Despite this significant growth potential, high technological and capital barriers have impeded the expansion of the private sector, with many companies struggling to secure the necessary resources for new investments, officials noted.

The government aims to boost the recycling rate of 10 strategic critical minerals to 20 percent by 2030 through regulatory reforms and support for the industry.

Firstly, the government plans to lower tariffs in line with global standards, the ministry indicated. Presently, major economies such as Japan, the United States, and the European Union impose zero tariffs on crucial materials utilized in critical mineral recycling.

Additionally, a joint council comprising representatives from both public and private sectors will be established to identify promising recycling projects and facilitate direct investment through a supply chain stabilization fund.

Moreover, the government intends to relax regulations on the distribution of recycling materials by reclassifying certain materials as “recyclable resources” instead of waste, which will ease transport and storage restrictions.

In a separate initiative, a response team will be formed to enhance the supply of rare earth elements. This will include encouraging investment in overseas resource development, innovating technologies to minimize rare earth usage, and increasing public reserves.

This proactive plan follows China's recent announcement of stricter export restrictions on critical minerals, raising concerns regarding stable supplies for advanced industries such as semiconductors and electric vehicles, which are crucial to South Korea's exports.

In a positive development, during a summit in South Korea on Thursday, U.S. President Donald Trump and Chinese President Xi Jinping reached an agreement to lift restrictions on exports of Chinese rare earths.