Korea–Mongolia CEPA Reaches Agreement in Principle: What It Could Change for Critical Minerals

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Picture agreeing on the price of a house and shaking hands on it, but not yet signing the contract. That is roughly where Korea and Mongolia stand today. On July 9, 2026, the leaders of the two countries declared an “agreement in principle” on a Comprehensive Economic Partnership Agreement (CEPA). The broad framework is settled, but the government has said some technical issues remain, and formal signature, ratification and entry into force all still lie ahead.

What makes this announcement notable is one phrase: critical minerals. Copper, molybdenum, rare earths and tungsten feed into batteries, semiconductors, specialty steel and defense manufacturing, and diversifying where they come from has become a policy priority in many countries. This article walks through what the announced numbers actually mean, and — just as importantly — which bottlenecks a tariff deal cannot solve on its own.

An Agreement in Principle Is Neither Signature Nor Entry into Force

Trade agreements typically move through a sequence of stages: negotiations, agreement in principle, legal scrubbing of remaining technical issues, formal signature, domestic ratification in each country, and finally entry into force. What the two leaders declared on July 9, 2026 is the second of these stages. The official announcement itself notes that some technical matters are still outstanding.

The distance between agreement in principle and entry into force varies from deal to deal. Some agreements are signed within months; others take considerably longer as legal texts are finalized and domestic procedures run their course. That is why it would be inaccurate to say the agreement has been “signed” or that tariffs have already been eliminated. What is confirmed today is the framework and its headline terms — nothing more, and nothing less.

The distinction matters because the date that affects real transactions is the entry-into-force date. Every tariff change discussed below is conditional on that milestone. Until then, existing tariffs and rules continue to apply.

A supporting visual built from the locked official-source claims. Tap the image to open the primary source.

Reading the Numbers: What “Over 90% Liberalization” Means

According to the government announcement, Korea will liberalize 96.3% of tariff lines covering 94.5% of import value, while Mongolia will liberalize 94.4% of tariff lines covering 90.9% of import value. It is worth understanding why both measures are reported. Tariff lines count the share of product categories in the tariff schedule that are opened; import value measures how much of the actual trade flow those categories represent.

A deal could in theory boast a high tariff-line figure while quietly excluding the products that are actually traded in volume, which would show up as a low import-value figure. Here, both measures exceed 90% for both countries, suggesting the liberalization covers most of the real trade relationship rather than just the paper one. Which products get immediate elimination versus phased schedules will only become clear when the final tariff schedules are published.

The key facts at a glance:

Item Detail Current status

Agreement in principle Declared by the two leaders on July 9, 2026 Announced; some technical issues remain

Korea’s liberalization 96.3% of tariff lines, 94.5% of import value Government-announced figure

Mongolia’s liberalization 94.4% of tariff lines, 90.9% of import value Government-announced figure

Copper, molybdenum, rare earths 2–5% import tariffs, planned immediate elimination at entry into force Plan; not yet in force

Mongolian tungsten concentrate 27 tonnes supplied in June 2026; expansion to 50 tonnes planned from July June delivered; expansion is a plan

Copper, Molybdenum and Rare Earths: If the 2–5% Tariffs Go

The most concrete mineral-related detail in the announcement concerns tariffs. Korea plans to immediately eliminate, upon entry into force, the 2–5% import tariffs on copper, molybdenum and rare earths specified by the ministry. A few percentage points may sound modest, but in commodity trade — where volumes are large and margins are negotiated finely — a tariff differential of that size can influence sourcing decisions.

Each of these materials sits deep in industrial supply chains. Copper runs through wiring, power grids and electric vehicles. Molybdenum strengthens specialty steels and alloys. Rare earths are essential to permanent magnets and electronic components. Removing tariffs on these inputs moves Mongolian material a step closer to price parity with competing suppliers, all else being equal.

Two caveats belong alongside that statement. First, the elimination is a plan conditional on entry into force; current tariffs remain until then. Second, tariffs are only one component of landed cost. Mining costs, processing fees and transport charges often weigh far more heavily in the final price.

Tungsten: 27 Tonnes in June, 50 Tonnes Planned from July

The announcement includes one tangible trade flow. Mongolian tungsten concentrate was supplied to Korea in a volume of 27 tonnes in June 2026, with an expansion to 50 tonnes planned from July. Tungsten is used in cutting tools, specialty alloys and defense-related materials, and because its supply is concentrated in a small number of countries, it features prominently in diversification discussions.

In absolute terms, 27 or even 50 tonnes is small relative to industrial demand. The sensible reading is not that these shipments reshape the supply picture, but that a physical trade channel has started operating — real material moving in parallel with the diplomatic process, with a stated intention to scale it up.

The status distinction applies here too. The June shipment of 27 tonnes has happened; the 50-tonne monthly level from July is a plan. Whether the plan converts into sustained deliveries is something to verify over the coming months.

The Heavier Constraints: From Mine to Refinery

Zero tariffs do not make minerals appear at the port. A mineral supply chain is a long sequence — mining, concentration, refining and downstream processing — and each stage demands capital, equipment and technical capability. Mongolia holding rich deposits is one thing; those deposits reliably reaching Korean industry in usable form is another.

Refining is a particular chokepoint. Globally, refining capacity for many critical minerals is concentrated in a handful of countries. Concentrate imported from Mongolia still has to be refined somewhere before it becomes usable material, and without capacity at that stage, the benefit of tariff elimination is inherently limited. Mine development itself is also a long-horizon business, often taking years from exploration to production.

Finally, there is commercial viability. Even with a tariff advantage, if the all-in cost of Mongolian material — extraction, processing, transport — exceeds that of alternative suppliers, trade will not grow on goodwill alone. An agreement improves the conditions for trade; it does not guarantee the economics.

The Logistics Equation of a Landlocked Country

Mongolia has no coastline. Minerals produced there must cross neighboring countries by rail or road before reaching a port bound for Korea. Transit costs, transport times and the infrastructure conditions along those corridors are major variables in how much trade actually materializes.

Landlocked exporters generally face higher logistics costs than coastal ones, and heavy, bulky cargo such as mineral concentrate feels this most acutely. If transport adds costs larger than the 2–5% tariff being removed, the competitiveness math changes accordingly. Assessing this agreement therefore means watching logistics corridors as closely as tariff schedules.

Much of this sits outside the agreement’s text. Rail connectivity, customs procedures and transport cooperation are tasks that have to advance separately from the CEPA itself.

Checkpoints to Watch from Here

The sequence of things to verify runs roughly as follows. First, when the remaining technical issues are resolved; second, when formal signature takes place. After signature come the domestic ratification procedures in both countries, and only once an entry-into-force date is set do the tariff eliminations actually begin.

On substance, the publication of final tariff schedules will reveal the product-by-product timeline — which lines are eliminated immediately and which are phased. For critical minerals specifically, the things to watch are whether the planned expansion of tungsten concentrate to 50 tonnes materializes, and whether trade flows in copper, molybdenum and rare earths actually shift after entry into force.

One further caution: figures announced at the agreement-in-principle stage can, in theory, see technical adjustments in the final legal text. The signed agreement and its schedules will be the authoritative reference.

What Is Confirmed, and What Is Not Yet

To summarize: the confirmed facts are that the two leaders declared an agreement in principle on July 9, 2026; that the announced liberalization rates exceed 90% for both countries on both measures; and that 27 tonnes of Mongolian tungsten concentrate were supplied to Korea in June 2026. The items still at the plan stage are the immediate elimination of the 2–5% tariffs on copper, molybdenum and rare earths at entry into force, and the tungsten expansion to 50 tonnes from July.

Independent of the agreement, the structural constraints remain: mining and concentration capacity, refining, overland logistics and commercial viability. Tariffs improve one necessary condition for supply-chain diversification; they are not a sufficient one. The practical approach from here is to track the signature, ratification and entry-into-force milestones as they are officially announced.

This article is an educational explainer based on public government announcements. It is not investment advice and does not constitute a recommendation to buy or sell any asset or security.

References

• Government press release: Korea–Mongolia CEPA agreement in principle (1)

• Government press release: Korea–Mongolia CEPA agreement in principle (2)