Korea, Vietnam to further cooperate on supply of key minerals

Industry

Published: 23 Jun. 2023, 18:51 Updated: 23 Jun. 2023, 19:20

Korea, Vietnam to further cooperate on supply of key minerals

Samsung Electronics Executive Chairman Lee Jae-yong and Hyundai Motor Group Executive Chair Euisun Chung participate the business forum between Korea and Vietnam held in Hanoi on Friday. [YONHAP]

Korea and Vietnam agreed to cooperate more closely in commerce, technology, and the mineral supply chain, forging more than 100 preliminary business agreements Friday during President Yoon Suk Yeol’s state visit to the Southeast Asian country.

The highlight of the business-related partnerships concerned the stable supply of essential minerals like rare earth elements as Korea is seeking to reduce its reliance on China for the provision of key minerals.

In a memorandum of understanding (MOU) signed Friday, they agreed to build "a supply chain center" that will carry out joint studies on mining and processing important minerals.

The center will also support establishing joint ventures between companies from the two countries in the related field and provide administrative support to Korean companies which hope to set up shop in Vietnam.

Vietnam is the world’s second-largest rare-earth element reserve and the world’s third-largest in tungsten.

“The two countries are seeking a synergy effect from the horizontal cooperative model where Vietnam’s affluent resources meet Korea’s superior processing technology,” Korea’s Ministry of Trade, Industry, and Energy said in a release Friday.

The two countries held a business forum on Friday where more than 600 business people and politicians from the two countries gathered to talk about possible cooperation.

SK Inc. Chairman Chey Tae-won who heads Korea Chamber of Commerce and Industry, gives a welcoming speech to participants of the business forum between Korea and Vietnam held in Hanoi on Friday. [YONHAP]

President Yoon, SK Inc. Chairman Chey Tae-won who is serving as the head of the Korea Chamber of Commerce and Industry, Samsung Electronics Executive Chairman Lee Jae-yong, Hyundai Motor Group Executive Chair Euisun Chung, and LG Corp Chairman Koo Kwang-mo were part of the Korean contingent.

Vietnam's Prime Minister Pham Minh Chinh, Planning and Investment Minister Nguyen Chi Dung, and Minister of Industry and Trade Nguyen Hong Dien were also in attendance.

Some 52 MOUs were signed for sectors ranging from defense, agricultural and marine products to healthcare.

In the future technology sector, which includes electric vehicles, 28 MOUs were signed.

Another 29 MOUs were signed on stabilizing the mineral supply chain and reducing greenhouse gases.

“Seoul and Hanoi are more than 3,000 kilometers apart from each other but we have become core partners in almost all sectors from commerce, investment, the exchange of human resources and culture,” said President Yoon at the event.

“As we are partners in enacting comprehensive strategies, we have to establish a horizontal cooperative relationship.”

Among the partnerships was collaborating in the concentration and processing of minerals between the Korea Institute of Geoscience and Mineral Resources and the Vietnam Geological Department.

Korea National Oil Corporation and its Vietnamese counterpart agreed to work together on joint petroleum storage projects.

The agreements also spilled over into the finance sector.

The Korean government signed an MOU with Vietnam to offer up to $4 billion worth of low-interest-rate loans through Korea's foreign aid programs.

The Finance Ministry said Friday that the maximum limit for the Economic Development Cooperation Fund allotted to Vietnam will be increased to $2 billion for the period between 2024 and 2030 from the current $1.5 billion. The ceiling for the Economic Development Promotion Facility, an aid program that supports infrastructure projects, will be raised to $20 billion.

The ministry said it expects the extended loans to benefit Korean builders and manufacturers as they participate in projects related to the aid programs.

Korea formed bilateral ties with Vietnam in 1992, with Vietnam becoming Korea's third biggest trade partner after the United States and China. Korea has also made the biggest foreign direct investment in Vietnam to date.

BY JIN EUN-SOO, PARK EUN-JEE [jin.eunsoo@joongang.co.kr]