Korea Resources Corp. (KORES) recently called for bids for its 10 percent share in the Cobre Panama copper mine one year ahead of commercial production. Four or five foreign companies reportedly participated in the tender. In other words, the stake is likely to end up in the hands of a foreign company once the sale procedure is completed in May. Back in March 2018, the South Korean government told state-run energy development companies to sell off their overseas assets.
The copper mine is located in Donoso, Colon, 120 kilometers to the west of Panama City. The project is one of the most successful overseas resources development projects of KORES. The mine, the 10th-largest of its kind in the world, has 3.2 billion tons of copper. KORES has participated in the project for 10 years, test production started in February this year, and commercial production can be initiated early next year, which means risks are already addressed. The commercial production is expected to lead to an annual supply volume of 35,000 tons.
In fact, the non-participation of South Korean energy development companies was already predicted. Those in the private sector include POSCO Daewoo, LG International and Samsung C&T, and they are currently in no position to acquire the one trillion won project. Besides, overseas resources development is being shunned by both public and private companies in the wake of the corruption scandals during the previous Lee Myung-bak administration.
KORES had to sell its shares in the Moolarben mine in Australia and the Rosemont copper mine in the United States in December 2018 and March 2019, respectively. Those are highly profitable mines like the Cobre Panama copper mine. Experts point out that the government should step in so that KORES can dispose of its less profitable assets first, examples of which include the Boleo copper mine in Mexico. KORES has invested more than 1.64 trillion won in the mine so far, yet normal production is yet to begin.