South Korea Plans to Spend $15 Million to Increase Rare-Earths Stockpiles

South Korea plans to spend 17 billion won ($15 million) to increase stockpiles of rare earths, a group of 17 metals used in hybrid vehicles and laptop computers, by 2016 after China curtailed exports of the minerals to Japan.

The nation, which imports almost all its energy and mineral needs, aims to secure 1,200 metric tons in stockpiles by 2016, the Ministry of Knowledge Economy said in an e-mailed statement today without giving the current inventory volume.

Japan’s Economy Minister Banri Kaieda Tuesday said China’s “de facto” export ban on rare earths will hurt its economy after media reports said China was restricting shipments. Ties between China and Japan soured this month over the detention of a Chinese boat captain whose ship collided with two Japanese Coast Guard vessels in disputed waters.

South Korea will encourage companies to use rare-earth substitutes to reduce imports, the ministry said. The nation imported 2,600 tons of rare earths last year mainly from China, according to the ministry. China is the world’s largest supplier.

Asia’s fourth-largest energy consumer, Korea Electric Power Corp., will also seek to buy stakes in a coal mine in North America and a uranium project in Western Europe by the end of this year to secure stable supply of minerals used for power generation, the ministry said.

State-run Korea National Oil Corp. plans to drill three more blocks in Iraq after it discovered oil and gas in the Bazian field in August in northern Iraq, while Korea Gas Corp. is seeking offshore gas project opportunities in East Timor and Mozambique, according to the statement.

Korea Resources Corp. will seek to buy a stake in the NX Uno lithium project in Chile and purchase a copper mining company in the nation.

To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net.

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.