(Kim Ho-young)

South Korea and Brazil agreed to cooperate on rare earth development and investment at a summit between South Korean President Lee Jae-myung and his counterpart Luiz Inácio Lula da Silva on Monday.

In opening remarks at an expanded Korea-Brazil summit at the Blue House in Seoul, President Lee said the two countries agreed to upgrade bilateral ties back to a strategic partnership and broaden economic cooperation.

He said collaboration would expand across areas including critical minerals, the environment, space, culture, and small and medium sized enterprises.

President Lula said Brazil holds the world’s largest rare earth reserves and substantial nickel deposits, calling for greater investment by Korean companies in critical minerals.

He reiterated Brazil’s interest in expanding cooperation with Korean firms in sectors including semiconductors, space, and defense.

According to the U.S. Geological Survey, Brazil’s rare earth reserves are estimated at about 21 million tons, the second largest globally after China’s roughly 44 million tons.

Despite its large reserves, Brazil accounts for less than 1 percent of global production due to limited mining and refining capacity.

As of 2023, Korea depended on China for about 60 percent of its rare earth raw material imports and about 89 percent of its rare earth materials and components imports.

The two leaders also agreed to expand cooperation in future industries including space, defense, and aviation.

Lee expressed interest in cooperation in civilian aircraft manufacturing, where Brazil has strengths, and cited last December’s launch attempt of Korea’s first commercial space launch vehicle at Brazil’s Alcantara Space Center as a key asset for bilateral space cooperation.

Lula also called for broader cooperation in agriculture and livestock, a major Brazilian export sector.

He said an early conclusion of sanitary and quarantine procedures for Brazilian beef exports would benefit Korean consumers.

Korea has traditionally relied heavily on U.S. and Australian beef imports, while Brazilian beef has faced tight restrictions due to quarantine requirements.

The leaders agreed on the need to make progress toward concluding a trade agreement between Korea and MERCOSUR, which includes Brazil, Argentina, Paraguay, and Uruguay.

Korea has held several rounds of talks with the bloc but has struggled to advance negotiations on key issues such as market access. Lee urged an early resumption of talks, and Lula agreed on the urgency of reaching an agreement.

The two governments also signed 10 memorandums of understanding covering trade and production, economy and finance, science and technology, agriculture, health, small and medium sized enterprises, and public security.

They agreed to strengthen cooperation in areas including industry and technology, agriculture, sanitary and quarantine measures, critical minerals, artificial intelligence and the digital economy, the green and bio economy, and trade and investment.

The two sides further agreed to establish a high level economic and trade relations committee, jointly overseen by the foreign and industry ministries, to create senior level dialogue channels spanning diplomacy, industry, trade, and agriculture.