Restructuring of Resource Development
The Ministry of Trade, Industry & Energy is planning to set up a new corporation by combining the financially troubled Korea Resources Corporation (KORES) with the Mine Reclamation Corporation (MRC).
KORES is a state-run company specializing in overseas resources development. Its capital has been impaired due to excessive investment in unprofitable projects. The ministry plans to sell off all of its overseas assets under a phased restructuring scheme.
Under the plan, a task force will be launched next month to establish the envisioned new corporation. The ministry will seek to amend the relevant laws within this year to shut down KORES and transfer its assets, liabilities and functions to the MRC.
The planned new corporation will be launched by absorbing all of the assets, liabilities and manpower of both KORES and the MRC.
While KORES’s overseas assets will be sold off without exception, the ministry will not set sales deadlines to avoid the erosion of their value. Assets deemed strategically important in terms of metallic mineral supply will be sold to South Korean companies, with the related KORES employees to be laid off during the sales process. The corporation’s Overseas Resources Development Headquarters will remain in operation for a while for the maintenance and management of the assets.
According to the ministry’s plan, the new corporation will differ from KORES as it will not make direct investment in exploration and development of overseas resources. Its role will be limited to supporting resources development by the private sector. It will focus on providing assistance for overseas resources development and technical consulting to private companies by making use of KORES’s professional manpower and know-how.
In the meantime, the South Korean government is planning to come up with a national plan for overseas resources development within this year so that development and investment by the private sector can be further promoted. The plan calls for adjusting the metallic mineral management functions of the Public Procurement Service (PPS) and KORES for integrated management and enhanced stability on the supply side. At present, KORES’s reserves include 10 types of metals to be used in the event of national emergency, while the PPS stores 14 for price stabilization purposes.