South Korea is recognized as a semiconductor powerhouse, with artificial intelligence, data centers, secondary batteries, power grids, robotics, and the space industry identified as future growth engines. The domestically developed KF-21 fighter jet has emerged as a new symbol of South Korea's advanced manufacturing sector. However, there is a fundamental premise that is often overlooked: all these advanced industries cannot exist without the necessary minerals.
No matter how advanced semiconductor and battery technologies are, there are limits to implementing them as industries if raw materials cannot be secured reliably. A single fighter jet contains numerous metals and special materials. As AI proliferates, the demand for data centers and power grids increases, requiring vast amounts of copper. Electric vehicles and energy storage systems need lithium, nickel, and graphite. The competition in advanced industries is not only a technological race but also a competition over supply chains for materials and minerals.
From this perspective, looking at the world map reveals a different view of South America. Chile and Peru are global leaders in copper production, while Chile and Argentina are major lithium producers. Brazil and several other countries are rich in strategic minerals such as niobium, graphite, and rare earths. Although physically distant from Korea, from the perspective of future industries and economic security, this region is not far at all.
Having worked in South America for many years, I have witnessed both the potential of the region and the limitations of Korea's relationship with it. As supply chain competition intensifies, how has our perspective changed from the past? Are we still viewing South America merely as a distant market or a target for development cooperation, only visited by economic delegations during presidential trips? If we consider semiconductors, AI, and advanced defense industries as national strategic industries, we must also view South America, which possesses the minerals and energy that enable these industries, from a national strategy perspective.
What is resource diplomacy?
The South Korean government continues to emphasize the importance of securing key minerals, diversifying supply chains, and engaging in resource diplomacy. I fully agree with the necessity of this. However, as I delve into related materials, a fundamental question arises: what exactly do we mean by 'resource diplomacy'?
Is it about discussing mineral cooperation at summits and signing MOUs? Is it about purchasing necessary minerals through long-term contracts? Or is it about investing in mines, securing production rights, and participating in the supply chain through smelting, refining, and logistics? If this is not clear, then 'securing key minerals' and 'diversifying supply chains' will remain mere slogans.
To engage in effective resource diplomacy, we must first understand the ecosystem of the mineral industry. Just because minerals are found underground does not mean they can be immediately used in semiconductor or battery factories. Copper must be mined, concentrated into copper concentrate, and then undergo smelting and refining to become industrial materials like copper cathodes. Lithium must also be extracted from brine or ore and then refined and processed, while rare earths require complex processes to separate and purify the necessary elements.
Thus, securing a mine is not the same as securing minerals that can actually be used in industry. We need to consider who owns and develops the mine, where the produced minerals go, who smelts and refines them, and who provides the power, water, railways, ports, and logistics to see the reality of the supply chain.
China builds pathways, not just mines
Examining what China has done in South America over the past few decades clarifies this structure. China has secured stakes in overseas mines, long-term purchases of their products, and built a large-scale smelting, refining, and materials industry at home. The Las Bambas copper mine in Peru is owned by a Chinese consortium, while the Toromocho mine is developed and operated by the Chinese state-owned enterprise Chinalco. The Chinese company Shougang has long operated the Marcona iron mine in Peru, and Chinese capital is involved in the Port of Chancay, establishing a new logistics hub connecting South America and Asia.
What is even more noteworthy is what happens after mining. In 2025, Chile accounted for about 23% of global copper concentrate production. In the same year, the share of concentrate in Chile's copper production was about 64%, with roughly two-thirds of exported copper concentrate heading to China. In contrast, Chile's share of global refined copper production was only about 4.3%, and the operating rate of its domestic refining facilities was around 60%. Peru also sends about 70% of its copper exports to China. While the mines are in South America, the vast minerals extracted are linked to China's industrial ecosystem.
The issue is even more pronounced with rare earths. Even if a mine is secured, lacking the ability to separate and refine the elements means relying on other countries for critical intermediate steps. China's strength lies not only in securing many mines but also in having built a pathway over decades that connects mining, concentrate, smelting, refining, materials, manufacturing, and logistics.
Therefore, 'decoupling from China' is not as easy as it sounds. Declaring that we will not buy Chinese minerals does not create a new supply chain. If China is removed, who will provide long-term capital for mine development and purchase the products? If we want to reduce our dependence on China, we must first answer what roles we will take on from what China has been doing.
What should Korea do in resource diplomacy?
Korean companies have secured necessary raw materials through long-term purchase agreements known as offtake agreements. This is a rational approach, as mine development requires massive capital and time, and there are significant geological, price, environmental, and community risks. However, minerals are not general commodities that can be purchased in the market whenever needed if one has money. A significant portion of the production from major mines is already sold under long-term contracts. Ultimately, what matters is not just the ability to purchase but having a stable supply chain that allows long-term access to the necessary minerals. Establishing good relations with the governments of resource-rich countries does not automatically secure minerals. Governments decide on mining rights, development permits, tax policies, and environmental regulations, but global mining companies and private enterprises are deeply involved in actual mine development, production, and sales.
That said, I am not advocating for a blanket approach of acquiring overseas mines as in the past. The term 'resource diplomacy' carries the memory of the significant losses left by past overseas resource development. The El Boleo mine in Mexico illustrates why we must be cautious. The Korea Resources Corporation invested over 3 trillion won in this project, but losses accumulated, and ultimately, in November 2025, it sold its entire stake and bonds with virtually no recovery. The need for minerals at a national level and the economic viability of individual mining projects are entirely different issues. We must thoroughly assess reserves, grades, development costs, processing technologies, infrastructure, operational capabilities, and price volatility risks. Urgency and haste are not the same.
Strategies must differ by mineral. For some minerals, there may be sufficient supply through market purchases and long-term contracts, while others may require a combination of offtake agreements and equity investments. For minerals directly linked to core industries such as semiconductors, batteries, power grids, and defense, it is necessary to consider mine equity, development participation, production rights, and domestic and international smelting and refining capabilities.
At the same time, we must also consider the perspective of South America. Chile and Peru do not only want to extract more minerals to sell abroad. They wish to expand processing and industrialization within their countries to retain more added value and jobs. If we need minerals, the counterpart countries need industrial development. Connecting these two interests is true resource diplomacy.
Chile already has a foundation for copper smelting and refining, as well as lithium extraction, refining, and processing industries. Therefore, we can consider cooperation in modernizing aging facilities, improving productivity and energy efficiency, and developing industries related to wires, cables, copper foil, electrical devices, and battery materials.
It is not necessary to directly develop mines or invest in large-scale smelting facilities from the outset. The domestic tech startup N2E Materials is pursuing the introduction of panels developed to accelerate the natural evaporation of lithium brine in collaboration with Chile's leading lithium producer SQM (now Nova Andino Litio SpA), and is also supplying domestic products such as IoT systems for monitoring and high-strength piping (IPVC) to the copper mine Minera Los Mantos. This demonstrates that even small startups with competitive technologies can steadily enter the supply chains of global mining companies by exploring local markets.
South Korea has many companies with technologies that can be utilized in mining productivity, safety, energy, environment, automation, and monitoring. These companies can start by supplying technology, equipment, and services while building networks with local mining companies and understanding the industrial structure. Small technological collaborations can expand into long-term contracts and joint ventures, eventually leading to investments and offtake agreements. Resource diplomacy does not have to start with purchasing mines; we must first enter the mining ecosystem.
It's time to rethink diplomacy with South America
Recently, the president's visits to Brazil, Chile, Argentina, and a state visit to Mexico have laid the groundwork for expanding cooperation on key mineral supply chains with South America. An MOU on mineral resource partnerships was signed with Chile, and a cooperation framework for exploration, mining, investment, and joint ventures for key minerals, including lithium, was established with Argentina. With Brazil, the direction was set for cooperation not only in mining but also in mid- and downstream processing and value creation, including rare earths. An economic and industrial resource cooperation initiative was signed with Mexico, and a joint committee for mineral resource cooperation between the two governments was established.
If diplomatic efforts have opened the door, actual business must follow through that door. We need to determine which minerals are needed, from which countries and mines they will be secured, who will invest, who will purchase, and how to connect smelting, refining, finance, and logistics into concrete projects.
This requires not only the government but also companies that use minerals and financial institutions to work together. Behind this, there must be individuals who understand South American mining, companies, mining policies, and legal systems, as well as the connections between smelting, refining, international finance, contracts, environmental and community issues, logistics, and local languages. Without a system for prioritizing minerals and a collaborative body for demand companies, financial institutions, and public agencies to create projects together, resource diplomacy will inevitably revert to the starting point every time summits and economic delegations pass by.
China has connected mining investments, long-term purchases, smelting, refining, materials industries, and logistics over decades. We cannot replace that structure overnight. It is now time to identify what minerals are necessary for the future of Korean industry, where and how much to secure them, and which parts of the supply chain we will directly enter, one step at a time.
What we should have in our hands ten years from now is not just photos from summits and another MOU. It should be actual minerals, stable supply contracts, technology and infrastructure, networks with local companies, and a pool of professionals to continuously develop these relationships. South America is no longer a resource-rich country far from Korea. It is a strategic partner with whom we must design the future of Korea's industrial and economic security together. Resource diplomacy is about creating the pathways that allow minerals to come from the ground into our industries. It is time to actually build that pathway.
Author's Major Background
Former diplomat specializing in South America, Honorary Professor at Trujillo National University in Peru, Senior Advisor at Dentons Cardenas & Cardenas law firm in Colombia.
* This article has been translated by AI.
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