Korea, Chile sign MOU on mineral cooperation

Korean Prime Minister Han Duck-soo, left, shakes hands with Chilean President Gabriel Boric at the presidential palace in Santiago, Chile, during the former's official trip to Latin American countries, Tuesday local time. Courtesy of the prime minister's office

By Lee Hae-rin

Korea and Chile signed a memorandum of understanding (MOU) for bilateral cooperation in mining and mineral resources in Santiago and agreed to elevate bilateral relations to a strategic partnership, the prime minister's office said.

Prime Minister Han Duck-soo held talks with Chilean President Gabriel Boric at the presidential palace in Santiago, Tuesday (local time), and signed the non-binding pact. Han is on an official trip to the South American country on the occasion of the 60th anniversary of diplomatic ties between the two nations.

“It (the MOU on mineral cooperation) is Korea's bridgehead to entering the Latin American market,” Han said, “I think we should invest more in Chile for raw materials like minerals, which are key to economic security.”

The MOU calls for research and development cooperation between the Korea Mine Rehabilitation and mineral Resources Corp. (KOMIR) and its Chilean counterpart in the supply of mineral resources, including lithium.

It is part of the country's efforts to deal with the U.S. Inflation Reduction Act (IRA) by diversifying supply chains of key materials used in batteries.

The U.S. law gives tax credits to electric vehicles (EVs) produced in North America or containing batteries made of materials sourced from the U.S. It is feared to present disadvantages to Korean automakers such as Hyundai Motor and Kia, which sell EVs manufactured in Korea to the U.S. market.

However, Korean companies could receive subsidies if they use minerals from Chile, which signed a free trade deal with the U.S. The South American country is rich in mineral resources, ranking first in lithium reserves and second in mineral supply in the world.

In addition, the two countries signed two other MOUs for research cooperation in agricultural technologies and democratic talks.

According to the MOU, Korea's Rural Development Administration and Chile's Ministry of Agriculture will cooperate in agricultural research and development to fight climate change and achieve carbon neutrality. Also, their ministries of foreign affairs will develop shared values on democracy and human rights and regularize a public-private consultative body.

Han also requested Chile to support the country's bid to host the 2030 World Expo in the southeastern city of Busan.

The prime minister is on a three-nation trip to South America. Chile was his first destination. He will also visit Uruguay and Argentina.