South Korea’s ruling party and the government are going to remove the overseas resources development function of the Korea Resources Corp. (KORES) while allowing it to develop natural resources in North Korea. The government explained that this is intended to promote inter-Korean economic cooperation, but some point out that this is self-contradictory.
On Nov. 13, Democratic Party of Korea lawmaker Hong Yeong-pyo and some of his colleagues proposed a bill to establish a new corporation by combining KORES with the Mine Reclamation Corp. (MIRECO).
According to the bill, KORES can no longer be engaged in mineral resource exploration and development, direct mine management, and investment in overseas corporations but is allowed to engaged in overseas asset management and disposal and support for mineral resource development led by the private sector. In short, KORES cannot be engaged in overseas resources development.
However, resources exploration and development in cooperation with North Korea was added to its functions. “KORES made a request to maintain its overseas resource exploration function at the least, but the request was turned down,” said an industry insider, adding, “The bill is hard to understand as it allows KORES to undertake resource development in North Korea. Officials say the bill reflects the improved inter-Korean relationship.”
In addition, the bill stipulates that the new corporation will have a legal capital of 3 trillion won and be allowed to issue debentures within 200% of its capital and reserve fund through a board meeting. As of the end of last year, KORES’ assets and liabilities were 4.15 trillion won (US$3.73 billion) and 5.43 trillion won (US$4.88 billion), respectively. MIRECO had 1.6 trillion won (US$1.4 billion) in assets and 320 billion won (US$288 million) in liabilities.