[Exclusive] Government Halts Sale of Ambatovy and Kobre Panama

Decision to Postpone Sale of Cobre Panama in May This Year... One of the World's Top 10 Copper Mines
Estimated Reserves of 3.147 Billion Tons... Copper Mining Possible Until 2054
Deemed 'Deep-rooted Evil' Under Moon Administration... Sold 11 Overseas Assets by Last Year
However, Sale of 13 Overseas Assets Continues as Planned... Concerns Over Resource Security Gap

Panama Cobre Panama copper mine overview. Korea Mine Reclamation Corporation acquired a 10% stake in the Cobre Panama mine in 2009.
[Photo by Asia Economy DB]

[Asia Economy Sejong=Reporter Lee Jun-hyung] The government has abruptly halted the sale of the Panama Cobre Panama copper mine, which had been labeled as a 'deep-rooted evil.' This is because the importance of overseas mines has increased due to ongoing supply chain instability caused by the Ukraine crisis and the acceleration of resource weaponization by major countries. However, concerns have been raised that there could be a gap in resource security as there are still quite a few overseas mines being sold.

According to related ministries on the 11th, the Overseas Asset Management Committee under the Ministry of Trade, Industry and Energy decided in May to temporarily suspend the sale of the Cobre Panama copper mine. It has been about four years since the Korea Mine Reclamation Corporation began selling the Cobre Panama mine in 2018 following government recommendations. A government official stated, "At the 6th Overseas Asset Management Committee meeting in May, the sale of the Cobre Panama mine was put on hold," adding, "Considerations included the fact that it has been profitable since last year."

The Cobre Panama mine is one of the world's top 10 copper mines, with reserves of approximately 3.147 billion tons. The Korea Mine Reclamation Corporation acquired a 10% stake in the Cobre Panama mine in 2009. Production began in 2019, and over the past three years, 684,000 tons of copper have been mined, generating a net profit of $750 million (about 1 trillion KRW) last year. The Korea Mine Reclamation Corporation expects to be able to mine hundreds of thousands of tons of copper annually from the Cobre Panama mine until 2054. Considering copper is a core material for advanced industries such as semiconductors and secondary batteries, it is evaluated that the mine can serve as a 'prime mine' for more than 30 years.

The reason this key mine was put on the sale table was due to the previous government's policy. The Moon Jae-in administration, which defined overseas resource development as a deep-rooted evil, decided in 2018 to sell all 26 overseas assets of the Korea Mine Reclamation Corporation. Accordingly, the corporation sold 11 overseas assets, including the Mulaben mine in Australia and the Santo Domingo mine in Chile, by last year. The Cobre Panama mine was one of the 15 overseas assets that the Korea Mine Reclamation Corporation was recently in the process of selling.

The Yoon Suk-yeol administration has expressed its intention to review overseas asset sales since the presidential transition committee period. This is because supply chain instability surrounding core industries such as semiconductors intensified following the Ukraine crisis. This was the reason why the Overseas Asset Management Committee decided in April, shortly after the transition committee was launched, not to sell the Ambatovy nickel mine in Madagascar. The Ambatovy mine is one of the world's top three nickel mines, with reserves of 210 million tons.

However, the other 13 overseas assets are proceeding with the sale process as originally planned. Currently, the Overseas Asset Management Committee has only halted the sale of two mines: the Ambatovy mine and the Cobre Panama mine. Another government official said, "The major direction regarding overseas asset sales has mostly been decided," adding, "The possibility of future changes in decisions is low."

Experts pointed out that selling overseas assets could cause more harm than good. Kang Cheon-gu, a professor in the Department of Energy Resources Engineering at Inha University, said, "Selling key mines immediately to reduce (Korea Mine Reclamation Corporation's) debt is a shortsighted decision," and added, "There is a need to reconsider overseas asset sales from the perspective of resource security."