Korea’s resource hunt moves beyond China

ALICE SPRINGS/DARWIN, Australia — China’s tightened grip on critical mineral exports has pushed Korean industrial groups to look to Australia’s Northern Territory for alternative supplies of rare earths and natural gas.

China controls as much as 90 percent of global rare earth refining, leaving manufacturers exposed to Beijing’s export restrictions. Hyundai Motor Group, SK Innovation E&S and Posco International are now exploring projects stretching from a rare earths deposit near Alice Springs to LNG and shale gas assets around Darwin.

Perth-based Arafura Rare Earths is developing the AU$1.6 billion ($1.1 billion) Nolans Project, which aims to become Australia’s first fully integrated “ore-to-oxide” rare earths mine and refinery.

Located 135 kilometers north of Alice Springs, the project is expected to supply about 4 percent of global demand for neodymium-praseodymium, or NdPr. The rare earth oxide is essential for permanent magnets used in electric vehicle motors, wind turbines, defense systems and industrial robots.

Main construction is scheduled to begin in September. Once operational, Nolans will supply Hyundai Motor and Kia with 1,500 metric tons of NdPr oxide annually — enough for magnets used in hundreds of thousands of EVs.

Hyundai is the project’s largest customer, with its offtake agreement accounting for 42 percent of Nolans’ targeted binding sales commitments, according to Arafura.

“The strategic partnership allows Hyundai to significantly reduce its reliance on the Chinese supply chain,” Stewart Forrest, head of Northern Territory and Indigenous affairs at Arafura Rare Earths, told The Korea Herald during a media tour organized by the Northern Territory government.

“One of the decisive factors is our ability to build a secure, ethically sourced supply chain as an alternative to those that exist today,” he said. “That gives Korean manufacturers a reliable source of rare earth materials and helps protect the industry’s long-term resilience.”

Asked whether the partnership could expand into humanoid robotics as demand for rare earths grows across advanced industries, Forrest said Arafura sees significant opportunities beyond EVs.

As companies such as Hyundai expand into emerging technologies, building partnerships at an early stage is critical, he said.

“Having those strong relationships between Korea and Australia is a great outcome for both parties.”

Australia’s vast Beetaloo Sub-basin could offer SK Innovation E&S a new long-term source of natural gas for its LNG infrastructure in Darwin.

The Korean energy company already has major interests in the region, including a 25 percent stake in the Darwin LNG terminal and a 37.5 percent stake in the offshore Barossa Gas Project, operated by Santos, Australia’s second-largest listed oil and gas producer.

But as existing offshore fields decline, the future of SK’s multibillion-dollar liquefaction terminal depends on securing a steady, high-volume gas supply to keep the facility operating and sustain LNG exports.

Tamboran Resources could emerge as a key supplier. The Sydney-based company is leading the development of the Beetaloo Sub-basin, one of Australia’s largest untapped shale gas resources, about 500 kilometers south of Darwin.

Tamboran plans to extract gas trapped in deep shale formations, positioning Beetaloo as a potential long-term supply source for Darwin’s LNG facilities. The first gas from the basin is expected to reach the market later this year.

Tamboran CEO Todd Abbott said the basin could contain about 300 trillion cubic feet of recoverable gas, enough to support daily production of 5 billion to 6 billion cubic feet for more than a century.

“That scale far exceeds domestic demand in Australia,” Abbott said, adding that exports through LNG facilities would be essential.

He declined to say whether Tamboran was pursuing a joint venture or strategic partnership with SK Innovation E&S but confirmed that discussions were taking place.

“Given the energy needs in Korea, we have had and are having conversations with Korean companies,” he said.

Asked about possible cooperation with Samsung C&T on engineering, procurement and construction, Abbott said commercializing a resource of this scale would require partners with a range of capabilities.

“Samsung C&T is another great example of who could benefit,” he said. “I think there is a significant opportunity.”

Posco International is also emerging as a potential partner. Although it has not made an investment decision, industry sources say the company has begun assessing Northern Territory shale gas as a possible new growth area.

Through its subsidiary Senex Energy, Posco International has experience developing conventional gas fields in eastern Australia. If it enters the Beetaloo project, the company would likely pursue an equity investment, joint venture or project-financing arrangement rather than act as operator, following an approach similar to its Senex investment.