“The lucky country” is not just a title favored by Australians but also embraced globally when referring to Australia. As of 2022, Australia ranks 12th in the world’s gross domestic product (GDP), and is politically stable. Above all, it is rich in natural resources and critical minerals. Australia ranks second globally in reserves of lithium and nickel, often referred to as the “new oil” for electric vehicle battery production. It also ranks second and sixth in reserves of cobalt and rare earth elements, respectively.
As a country abundant in resources, often dubbed the “resource superpower,” Australia is the largest mineral supplier to South Korea. When South Korea began industrialization in the 1970s, Australia exported iron ore, coal, and LNG to South Korea, using the proceeds to establish an energy industry. South Korea still relies on Australia for natural resource imports, with the country being the top importer of South Korea’s natural gas and iron ore in 2022.
South Korea depends on imports for about 95% of its mineral demand. To ensure competitiveness in advanced industries such as electric vehicles, batteries, and semiconductors, the stable supply chain of critical minerals, essential for these industries, must be secured. However, South Korea’s dependence on China remains high, with imports of 33 critical minerals from China reaching $9.3 billion last year, nearly three times the $3.3 billion in 2020. The Yoon Suk-yeol administration announced plans to secure the supply of critical minerals last year and aims to reduce import dependency on China from 80% to 50% by 2030. Australia, as a country rich in core minerals, has emerged as the optimal strategic partner for South Korea. As part of the strategy to stabilize the supply chain of key minerals, South Korea and Australia signed a critical minerals agreement in 2021.
Conversely, Australia has enjoyed prosperity from resource exports for over 30 years since 1994. However, the prices of lithium and nickel, essential materials for electric vehicle batteries, plummeted due to a slowdown in electric vehicle demand and oversupply. As of February this year, lithium and nickel prices have fallen 85% and 64%, respectively, from their peaks. Reflecting this, Australia’s total exports decreased by 12.4% last year compared to the previous year. Despite being among the top five producers of cobalt and rare earth elements, processing remains minimal, with a goal set to become a “globally significant” producer by 2030. In addition, emphasizing the possession of resources and key minerals necessary for the global transition to net zero emissions, Australia sees them as future growth engines.
The year 2024 marks the 10th anniversary of signing a free trade agreement (FTA) between South Korea and Australia. In line with this, ChosunBiz met with Julie Quinn, Senior Trade and Investment Commissioner of Seoul at Austrade, responsible for Australia’s trade and investment in South Korea, equivalent to KOTRA in South Korea. Quinn has served as a senior trade and investment commissioner for South Korea and Mongolia since January 2021, at the beginning of the COVID-19 pandemic. She plays a role in increasing Australia’s goods and services exports and attracting South Korean investors to Australia. Prior to joining Austrade in 2020, she worked in the health and biotechnology sector for 30 years, and served as the head of the Health Excellence Center at the Austrade office in Melbourne just before coming to South Korea.
Quinn emphasized that Australia can support South Korea’s key industries and transition to Net Zero through its abundant natural resources and critical minerals. She believes that trade can be expanded in industries such as space, beverages including whiskey, and healthcare. “We would welcome a visit by President Yoon Suk-Yeol to Australia in this 10th anniversary year of KAFTA,” she said.
As of January to July 2023, South Korea ranks third in Australia’s import and export countries. From South Korea’s perspective, Australia ranks eighth in exports and fifth in imports. Why is South Korea important to Australia as a trading partner?
“Australia and South Korea have had a deep and complementary economic relationship characterized by trust and stability for over 70 years. By guaranteeing secure supply of resources and energy, Australia enabled South Korea’s industrialisation. It has been an essential partner in South Korea’s exports of steel, autos and ships. Australia’s critical minerals, metals and rare earths will help South Korean companies maintain their lead in rechargeable batteries, solar cells, hydrogen fuel cells and electric vehicles.”
What are the major import and export items between South Korea and Australia?
“Australian iron ore, coal and gas comprise the largest exports by value to South Korea. These are followed by food and agricultural products, notably Australian beef that is so loved in South Korea. South Korea accounts for around 6% of Australia’s total agricultural exports. Australia is an ideal food security supply chain partner for South Korea. Grains including wheat and barley, horticultural products including citrus, grapes and cherries, even brussels sprouts are exported in volume to South Korea. South Korea, in return, has provided Australia with transformed products, such as petrol, cars and machinery. South Korean brands produce some of the most popular and recognisable products in Australia. Many of us have South Korean televisions, mobile phones, tablets and appliances. In 2023, Kia was the fourth highest selling car brand in Australia (76,120 vehicles) and Hyundai (75,183) placed fifth in market.”
Australia has essential minerals such as lithium, nickel, and cobalt. Are there intentions to enhance exports? Please clarify if there are plans to export core minerals related to South Korea.
“Australia has extensive natural resources and advanced mining capabilities. As a stable energy and resource exporter, Australia can play an important role in supplying South Korea with processed minerals. We currently export critical minerals such as lithium to South Korea. With 52 crucial minerals, Australia has a significant impact on the worldwide supply chain. Therefore, finding such a broad and rich resource base outside Australia would be difficult when securing future supply chain stability. Each year, Austrade Seoul expands its support to assist Korean investors and clients in forming connections with Australia.”
How can Australia assist South Korea in its pursuit of net-zero emissions?
“The leaders of both countries reaffirmed their dedication to attaining net-zero objectives through the Australia-Korea Comprehensive Strategic Partnership agreed in 2021. Every September, Australia dispatches a high-level delegation to the Hydrogen Industry Exhibition “H2MEET” in South Korea, where it seeks partnerships in hydrogen technology, capital, and procuring. South Korea is regarded as a critical collaborator in the energy transition. Furthermore, the “Korean CCUS (Carbon Capture, Utilization, and Storage) Association” was in Australia from May. 20 to 24 to engage with Australian partners, service providers, and contractors to assist South Korean energy companies in developing projects in Australia.”
In light of the global competition for net-zero, why should South Korea collaborate with Australia in this area?
“Australia and South Korea maintain a mutually beneficial economic partnership. Australia is a global leader in industrial development thanks to its abundance of renewable energy, critical minerals, and natural resources. Additionally, it has advanced mining technology. With these advantages, Australia can collaborate with partners such as South Korea, utilizing rich renewable sources, thereby contributing to decarbonization. Furthermore, Australia is one of the most politically stable nations globally. This combination presents an opportunity for South Korea to stabilize its future supply chain in light of the recent global political instability.”
Which industries are most likely to experience increased commerce between South Korea and Australia?
“Given the extensive land and clear heavens of Australia and South Korea’s ongoing satellite development, there is potential for future collaboration in space launches. Since the 1950s, Australia has been engaged in space exploration, which includes space monitoring and rocket launches. In 2018, the “Australian Space Agency” was established to resolve space-related issues. In 2025, Innospace, a Korean corporation, intends to launch its inaugural rocket from the Arnhem Space Centre in Australia.”
Are there any industries other than space that may profit from expanded commerce with Korea?
“Given the growing whisky consumption in South Korea, the potential for expanding Australian whisky exports is substantial. Last year, Australia exported AUD 140,000 (about 126.84 million won) worth of whisky to South Korea. We produce internationally recognized whisky. In addition, Australia’s distinctive climate and soil have resulted in the development of numerous wine-producing regions. In addition to the well-known red wines of South Australia, their white wines are also exceptional. I prefer Australian Chardonnay, and Pinot Grigio is my favorite.”
Is there any other industry sector?
The healthcare sector in Australia is relatively obscure. However, South Korean pharmaceutical and biotech companies favorably choose Australia for their several early-stage clinical trials. That is because we provide high-quality, rapid, and efficient clinical trial services founded on data recognized by the FDA and European regulatory agencies. Clinical trial representatives also participated in “Bio Korea 2024″ from May 8 to 10. Furthermore, Australia is a pioneer in the field of auditory health. Cochlear, a company specializing in hearing aids, maintains a presence in Seoul. Resmed, an Australian medical device company, distributes sleep apnea devices from its Seoul office.
How can trade and investment between South Korea and Australia be facilitated?
“Tourism is an informal yet effective method of enhancing mutual awareness of each other’s products and services. Australians can readily immerse themselves in Korean cuisine and culture, while South Koreans can relish Australian cattle and wine, thanks to the numerous flights between the two countries. It is important to note that South Korean communities in Sydney, Brisbane, Melbourne, and Perth serve as conduits for disseminating Korean culture throughout Australia.”
Are there any South Korean companies contributing to the expansion of trade between the two countries?
“Hanwha Defense Australia has constructed a manufacturing facility in Geelong, Australia. Following the signature of a contract with the Australian Defense Force (ADF), it has formed strong partnerships with Australian suppliers, enhancing the potential for two-way trade. In April, South Korean Defense Minister Shin Won-sik visited the production facility of Hanwha Defense Australia.”
