May 28, 2022
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South Korea hunts tungsten treasure in race for rare minerals

South Korea hunts tungsten treasure in race for rare minerals

SANGDONG, South Korea — Blue tungsten winking from the partitions of deserted mine shafts, in a city that’s seen higher days, might be a catalyst for South Korea’s bid to interrupt China’s dominance of vital minerals and stake its declare to the uncooked supplies of the long run. 

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

“Why reopen it now after 30 years? Because it means sovereignty over natural resources,” mentioned Lee Dong-seob, vp of mine proprietor Almonty Korea Tungsten Corp. 

“Resources have become weapons and strategic assets.” 

Sangdong is one among at the very least 30 vital mineral mines or processing vegetation globally which have been launched or reopened exterior China during the last 4 years, in response to a Reuters overview of initiatives introduced by governments and firms. These embrace initiatives creating lithium in Australia, rare earths in america and tungsten in Britain. 

The size of the plans illustrates the stress felt by international locations internationally to safe provides of vital minerals considered important for the inexperienced power transition, from lithium in EV batteries to magnesium in laptops and neodymium discovered in wind generators. 

General demand for such rare minerals is predicted to extend four-fold by 2040, the Worldwide Vitality Company mentioned final yr. For these used in electrical automobiles and battery storage, demand is projected to develop 30-fold, it added. 

Many international locations 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 biggest provider of vital minerals to america and Europe, in response to a research by the China Geological Survey in 2019. Of the 35 minerals america has categorized as vital, China is the biggest provider of 13, together with rare earth components important for clean-energy applied sciences, the research discovered. China is the biggest supply of 21 key minerals for the European Union, similar to antimony used in batteries, it mentioned. 

“In the critical raw material restaurant, China is sitting eating its dessert, and the rest of the world is in the taxi reading the menu,” mentioned Julian Kettle, senior vp for metals and mining at consultancy Wooden MacKenzie. 

‘HAVE TO HAVE A PLAN B’
The stakes are notably excessive for South Korea, house of main chipmakers like Samsung Electronics. The nation is the world’s largest client of tungsten per capita and depends on China for 95% of its imports of the steel, which is prized for its unequalled energy and its resistance to warmth. 

China controls over 80% of worldwide tungsten provides, in response to CRU Group, London-based commodity analysts. 

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

Lewis Black, CEO of Almonty Korea’s Canadian-based mother or father Almonty Industries, advised 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’s easy to buy from China and China is the largest trading partner of South Korea but they know they’re over-dependent,” Black mentioned. “You have to have a plan B right now.” 

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

The mine was closed in 1994 as a consequence 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 need by international locations 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 response to pricing company Asian Metallic. 

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

“We should keep running this kind of mine so that new technologies can be handed over to the next generations,” mentioned Kang Dong-hoon, a supervisor in Sangdong, the place a “Pride of Korea” signal is displayed on a wall of the mine workplace. 

“We have been lost in the mining industry for 30 years. If we lose this chance, then there will be no more.” 

Almonty Industries has signed a 15-year deal to promote tungsten to Pennsylvania-based International Tungsten & Powders, a provider to the U.S. army, which variously makes use of the steel in artillery shell suggestions, 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 in the Sangdong challenge. Such ventures should wrestle to compete with China and there are considerations amongst some business specialists that developed international locations is not going to comply with by means of on commitments to diversify provide chains for vital minerals. 

SUPPLY-CHAIN DIPLOMACY
Seoul arrange an Financial Safety Key Gadgets Taskforce after a provide disaster final November when Beijing tightened exports of urea answer, which many South Korean diesel automobiles are required by regulation 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 Sources Company (KOMIR), a authorities company accountable for nationwide useful resource safety, advised Reuters it had dedicated to subsidize about 37% of Sangdong’s tunneling prices and would contemplate additional help to mitigate any potential environmental harm. 

Incoming President Yoon Seok-yeol pledged in January to cut back mineral dependence on “a certain country,” and final month introduced a brand new useful resource technique that may permit the federal government to share stockpiling info with the personal sector. 

South Korea will not be alone. 

The US, European Union and Japan have all launched or up to date nationwide vital mineral provide methods during the last two years, laying out broad plans to take a position in extra diversified provide traces to cut back their reliance on China. 

Mineral provide chains have additionally grow to be a characteristic 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 just lately signed collaboration offers with Australia and Indonesia on mineral provide chains. 

“Supply-chain diplomacy will be prioritized by many governments in the coming years as accessing critical raw materials for the green and digital transition has become a top priority,” mentioned Henning Gloystein, director of power 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 rare earths, tungsten and copper. 

ENVIRONMENTAL OPPOSITION
Funding globally of $200 billion in extra mining and smelter capability is required to satisfy vital mineral provide demand by 2030, 10 instances what’s being dedicated at present, Kettle mentioned. 

But initiatives have confronted resistance from communities who don’t need a mine or smelter close to their properties. 

In January, for instance, stress from environmentalists prompted Serbia to revoke Rio Tinto’s lithium exploration license whereas U.S. President Joseph R. Biden, Jr.’s administration canceled two leases for Antofagasta’s copper and nickel mines in Minnesota. 

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

“Many of us in this town didn’t believe the mine would really come back,” mentioned Kim Kwang-gil, 75, who for a long time lived off the tungsten he panned from a stream flowing down from the mine when it operated. 

“The mine doesn’t need as many people as before, because everything is done by machines.” — Ju-min Park and Joe Brock/Reuters

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