Background

An opportunity to facilitate early recovery from a crisis caused by lack of access to rare metals and augment the industrial structure with virtuous circle

• Price volatility, supply contraction, and intensified competition for demand → Increasing calls for measures to obtain self-reliance in rare metals
• Weak value chain in the material industry → Increasing demand for boosting up materials industry with enhanced research capacities and improving self-reliance in raw materials

• External Conditions(External Conditions)
  • Price volatility heightens
  • Supply of rare metals shrinks
  • Competition for demand of rare metals deepens
• Domestic Conditions(Korea in Peril)
  • Dependence on overseas materials -> vulnerable to external conditions
  • Excessive consumption of rare materials aggravates
  • Absence of the materials industry-> strategic limits
• Improvement Strategy(Integrated SMART)
  • Multi-dimensional strategy focused on materials
  • A strategic project for elements tailored to Korea
  • Korea Institute for Rare Metals
• Prospects(Opportunities for Improvement)
  • The materials industry promoted
  • Self-reliance regarding rare metals enhanced
  • Industrial structure reinforced

Strategy

An opportunity to facilitate early recovery from a crisis caused by lack of access to rare metals and augment the industrial structure with virtuous circle

• Embryonic stage : No domestic industries throughout the entire circulation of materials
• Growing stage : Small but several businesses present
• Setting stage : Domestic mineral resources non-existent
• Stabilizing stage : The steel industry mostly using alloy iron

Differentiated supply stabilization strategy 1 according to the maturity of domestic industry by element (consisting of classification, resources, basic materials, intermediate materials, and recycling)

category		resource	base material	intermediary material	recycling
Industries Matured	Nickel Chrome Manganese Molybdenum Vanadium	X	O	O	O
		· Domestic industries already exist, mostly using alloy iron · Mutual growth with the steel industry, the main consumer
Self-reliance in Sight	Nickel Chrome Manganese Molybdenum Vanadium	O	X	O	X
		· Domestic industries already exist, mostly using alloy iron · Mutual growth with the steel industry, the main consumer
Infrastructure Being established	Nickel Chrome Manganese Molybdenum Vanadium	X	△	△	△
		· Domestic industries already exist, mostly using alloy iron · Mutual growth with the steel industry, the main consumer
Industries Non-existent	Chrome Manganese Molybdenum Vanadium	X	X	X	X
		· Domestic industries already exist, mostly using alloy iron · Mutual growth with the steel industry, the main consumer

Types	Development Strategy	Expected Effects
Industries Matured	Securing overseas resources, strategic stockpile	Connecting the self-reliance regarding rare metals with demand Industrial infrastructure for new growth of expert enterprises
Self-reliance in Sight	Developing domestic resources, promoting base material industry, fostering recycling materialization
Infrastructure Being Established	Reinforcing the materialization industry, materialization of reductive/alternative elements, recycling technology
Industries Non-existent	Supply stabilizing, establishing infrastructure of the materials industry, introducing new technology

Early transformation of five top-priority elements into growth engines→ Extended application of five priority elements in the near future.

- Identification of weak points in the material cycle of “resources-materialization-products-recycling” for each element → Completion of virtuous circle though obtainment of required technologies

* Technologies with priorities of development: 20 technologies (five top-priority elements in 2015) → 40 technologies (5+5 elements in 2020), and 10 world-leading technologies

Items	Weak Points of Domestic Industries	World's Top Technology
Gallium	Ore→(Base materials)→(Intermediary materials)→Products	Materialization technology for high-purity large LED
Platinum	Ore→(Base materials)→(Intermediary materials)→Products	Homogeneous dispersion of high-functional hyperfine particles
Indium	Ore→(Base materials)→(Intermediary materials)→Products	Materialization technology for a large target with an alternative to indium
Tungsten	Ore→(Base materials)→(Intermediary materials)→Products	Low-carbon green refinement, technologies of alternative materials
Rare Earth	Ore→(Base materials)→(Intermediary materials)→Products	High-functional magnet materials for hybrid vehicles

- For the elements with high instability of supply, which results from prospect of resource depletion and uneven regional distribution of reserves, it is an imperative to reduce the consumption of related elements and develop alternative materials and recycling technology → Facilitation of domestic self-reliance

Fields	Examples	Effects
[Reduction] Materialization technology→ Performance improvement→ Reduction in consumption	Reduction of platinum as auto exhaust catalyst	Decline in net inflow of platinum
[Alternative] General materials→ Development of new functions→ Alternative to rare metals	Display made of alternative transparent conductive materials	Rare metals-free industry
[recycling] Scraps→ Waste materials→ Collection of rare metals	Recycling of W and Co in the whole process of cemented carbide alloy	Recycling→ enhancement of self-reliance

Strategic Measures

Multi-dimensional research development considering the following flow: target elements→ current status of enterprises→ level of technology→ ripple effects on the market

• Business model geared towards infrastructure building : To develop core strategic industrial technologies, centered around seed companies, and engage with consumer companies
• Business model without domestic industries (domestic product companies exist): To establish a pilot infrastructure through research conducted by both production companies and intermediary organizations → to expand the business of existing corporations and seek start-up corporations
• Business model for leading the industry: To use intermediary organizations as material supply bases for pioneering research (new products, reduced and alternative elements) → When mass-produced, developed products and materials can be useful for business advances of materials firms.
• To avoid sporadic support, common for current R&D business, and, instead, adopt multi-dimensional, simultaneous execution of strategy for early achievement of outcomes → To stabilize supply and maximize ripple effects on the industry through the omni-dimensional deployment of material technology and circulatory materialization technology for base materials of each element, intermediate materials, and reduced/alternative materials