Lithium, rare metals, and mineral resources (hereinafter "critical minerals") are key inputs for strategic industries such as batteries, semiconductors, and wind power.
From 2025 to 2026, supply chain diversification ("friend-sharing"), strengthened ESG and carbon regulations, and resource nationalism will all be pursued simultaneously. This will further enhance the importance of long-term offtake, country-of-origin accumulation, and procurement cooperation through FTAs .
Risk factors | 2025-2026 Outlook | Influence (1~5) | Implications |
|---|---|---|---|
| Resource nationalism and export quotas | Selective export restrictions continue | 5 | Diversification, joint ventures, and offtake agreements are essential. |
| Price volatility (lithium/nickel) | Persistent volatility (investment and inventory impact) | 4 | Long-term fixed and floating mixed price system |
| Environmental and Carbon Regulation (CBAM) | Strengthening LCA requirements for mining and refining stages | 4 | Low-carbon refining and traceability |
| Geopolitical risks | Risk of dependence on a single country | 4 | Securing alternative and detour networks through RCEP and CEPA |
| Ethics and Human Rights Audit | Strengthening ESG due diligence in mining | 3 | Responsible Minerals System |
FTAs not only reduce tariffs on raw ores and concentrates themselves, but also enable **accumulation of origin** and access to procurement markets at the intermediate product stage, including refining, precursors, and active materials . Utilizing the Korea-UAE CEPA, Korea-EU FTA, and RCEP, Korean companies can deploy joint refining and processing within the region , meeting FTA Rules of Origin Requirements (PSR) and building low-carbon supply chains compliant with CBAM .
Sub-fields | FTA application points | Major challenges | Management Points |
|---|---|---|---|
| Lithium concentrate/carbonate/hydroxide (HS2825) | RCEP·CEPA tariff reductions, cumulative | Carbon Labeling and Traceability | LCA·MRV·Certificate of Analysis (CoA) |
| Nickel and cobalt (HS2603/2605) | EUFTA procurement and accumulation | Environmental and Human Rights Inspection | RMI·ESG due diligence report |
| Graphite and rare earth elements (HS2504/2615) | Alternative/Mixed Origin Management | Dependence on a specific country | Compliance with multi-origin mixing rules |
| Precursor/Active Material | Process layout to meet PSR | Complexity of fair judgment | Value-added (VC) management by process |
Critical minerals tend to have low tariffs , but in practice, environmental, ethical, and security standards are real barriers. The EU focuses on carbon and traceability , the UAE on procurement and joint ventures , and ASEAN on incentivizing local processing .
market | Key items | MFN (approximately) | When FTA is applied | Non-tariff barriers (core) | Comments |
|---|---|---|---|---|---|
| EU | Lithium salt, nickel, cobalt, graphite | 0~5% | 0% or low rate | LCA·CBAM·Ethics Audit | Low-carbon refining and EPD are essential |
| UAE | Lithium and rare earth refining and alloys | 5~10% | Step-by-step removal through CEPA | Procurement/Local JV | Middle East Refining Hub Cooperation Glass |
| japan | Nickel, cobalt, and rare earth elements | 0~3% | RCEP application | JIS·Safety·Quality | Joint inventory and joint refining are valid |
| ASEAN | Concentrates and intermediates | 0~5% | RCEP cumulative | Customs clearance and localization requirements | Suitable for processing and assembly bases |
| USA | Intermediate materials for batteries | 0~3% | FTA low rate | Security and Sanctions Regulations | Compliance with bypass supply chain regulations is required. |
The expansion of batteries and renewable energy will standardize carbon footprint, water resource, and human rights management throughout the entire process : mining → refining → precursor → active material .
System/Issue | Core requirements | Influence (1-5) | react |
|---|---|---|---|
| CBAM/Carbon Label | LCA, MRV, and low-carbon refining certification | 5 | EPD, low-carbon certification, and renewable energy power |
| Responsible Minerals (RMI, etc.) | Human Rights, Child Labor, and Safety Inspection | 4 | Third-party audit/on-site inspection report |
| Traceability system | Blockchain/ERP-based Traceability | 4 | Lot-to-Lot Tracking and Smart Tags |
| Circular economy and recycling | Scrap/Black Mass Recycling | 3 | Ensuring consistency of recycled origin and PSR |
| Water resources management | Water footprint and wastewater treatment | 3 | Application of international standards (ISO14046) |
Korea: Advancing precursor, active material, and refining technologies, expanding carbon-reducing refining (renewable power and heat recovery).
UAE and Saudi Arabia: Emerging as CEPA-based refining and blending hubs , promising long-term offtake-linked investments.
EU: Strong demand for low-carbon, ethical supply chains → Preference for joint refining/recycling joint ventures .
ASEAN: Expansion from raw ore to primary refining and intermediate materials processing hub.
The United States: Security and alliance-based supply chains, preferring processed goods from allies over direct procurement .
Integrates news/policy sentiment (α), raw material prices and inventories (β), and industrial sentiment (λ). A moderate improvement is expected in the fourth quarter of 2025, driven by Middle East/EU procurement projects and recycling demand .
variable | Δ(%) or exponent | analysis |
|---|---|---|
| ΔExport_now | +2.7 | Increase in exports of precursors and active materials |
| ΔImport_now | +1.9 | Increase in imports of refined intermediate products and concentrates |
| ΔPrice_now | +0.6 | Reflecting lithium/nickel fluctuations |
| ΔSignal_now | +0.036 | Procurement/JV News Friendly |
| ΔFTAEffect | +0.34 | Cumulative effects of CEPA and RCEP |
| Forecast_3M | +0.57 | 3-month gradual rise forecast |
Formula (summary): Forecast_3M = 0.5·ΔSignal + 0.3·ΔFTAEffect + 0.2·ΔPrice
field | Suggestion | Executor | Expected effect |
|---|---|---|---|
| Utilizing FTA and CEPA | Clarification of PSR at the refining and precursor stages and expansion of cumulative coverage | Trade Headquarters and Ministry of Trade, Industry and Energy | Mitigating country of origin risk |
| low-carbon refining | Assistance in renewable power generation, heat recovery, and continuous process | Ministry of Trade, Industry and Energy and Ministry of Environment | CBAM·LCA competitiveness |
| Responsible Minerals | Support for national RMI/ESG due diligence | Ministry of Foreign Affairs and KOTRA | Minimizing ethical risks |
| Recycling ecosystem | Black Mass → Precursor Incentive | Ministry of Strategy and Finance and local governments | Resource recycling and cost reduction |
| Finance and Insurance | Offtake + Policy Finance Package | Mountain and water | Hedging price fluctuations and policy risks |
The success or failure of critical minerals depends on optimization of the FTA-based ‘refining and intermediate materials’ stage .
Forecast_3M: +0.57 — CEPA and RCEP accumulation and demand for low-carbon and ethical procurement drive modest improvement.
Recommended strategies: ① Multi-origin and cumulative origin system ② Low-carbon LCA and traceability ③ Recycling and joint refining joint ventures ④ Offtake + policy financing combined structure.
