Overseas Mines Up for Sale Recorded 3 Billion KRW Operating Profit Last Year

Australia Waiyong Mine Listed for Sale Despite Profit Last Year
Overseas Mine Operating Profit of Korea Mine Reclamation Corporation Rises with Mineral Prices
Cobre Panama Copper Mine Operating Profit 164 Billion KRW
Sale of 'Prime Mine' Underway... "Should Not Sell for Resource Security"

[Asia Economy Reporter Kwon Hyun-ji] As the value of minerals rises amid raw material supply shortages, the overseas mines invested in by the Korea Mining Industry Promotion Corporation (KMIPC) also showed improved performance last year. Among these mines, some are currently being considered for sale by the government, strengthening the argument for a more cautious approach to their disposal.

According to data titled "Status of Overseas Mines Invested by KMIPC and Sale Plans," submitted by the Ministry of Trade, Industry and Energy to Rep. Koo Ja-geun of the People Power Party on the 4th, the total operating profit of 15 mines held (equity investment) by KMIPC as of the end of last year was 130.8 billion KRW. The mine with the highest profit was the Cobre Panama copper mine in Panama, with an operating profit reaching 163.979 billion KRW. It was followed by the Ambatovy nickel mine in Madagascar (7.718 billion KRW) and the Wyang flexible coal mine in Australia (3 billion KRW).

These are considered "prime mines" with abundant reserves. The Cobre Panama mine is one of the world's top 10 copper mines with reserves of approximately 3.147 billion tons, generating a net profit of 750 million USD (about 1 trillion KRW) last year. It is expected to produce hundreds of thousands of tons of copper annually until 2054, indicating high potential value. The Ambatovy mine is one of the world's top three nickel mines with nickel reserves of 146.2 million tons, and it can also extract 4,000 tons of cobalt annually. The Wyang mine is also a large-scale mine with flexible coal reserves of about 1.38 billion tons. Additionally, the Jiangjiahang limestone mine in China earned an operating profit of 667 million KRW, and the Minerva flexible coal mine in Australia earned 479 million KRW.

However, some of the mines that recorded operating profits last year are currently undergoing sales, raising questions about the appropriateness of these transactions. KMIPC previously purchased a 25% stake in the Jiangjiahang mine for 1.6 billion KRW but sold it for 1 billion KRW after incurring a loss of 600 million KRW. Currently, KMIPC holds a 49% stake in this mine and earned more than 600 million KRW in operating profit last year.

The Australian Wyang mine, which posted operating profits last year, is currently up for sale. KMIPC stated, "Since June last year, we have been conducting private negotiations with potential buyers" and "plan to reach an agreement on sale conditions through these negotiations." The Cobre Panama and Ambatovy mines were initially slated for sale during the Moon Jae-in administration but were halted as the supply chain crisis intensified.

Professor Kang Cheon-gu, a visiting professor in the Department of Energy Resources Engineering at Inha University, said, "Copper and nickel are minerals whose prices have risen due to the advanced industry hegemony wars involving semiconductors, secondary batteries, and batteries," adding, "We should not sell them but rather secure more. Since investments have been made to increase equity over 15 to 20 years, consistency must be maintained."

There are also opinions emphasizing the importance of long-term value over immediate profits. This means that holding onto these assets is more beneficial even if they do not generate operating profits right away. Professor Kang explained, "Even if resource prices fall, it is advisable not to sell core mines from the perspective of securing supply chains and resource security."