Korea Resources Corp. (KORES) announced on Aug. 12 that the tender for the sale of its stake in the Cobre Panama copper mine has been aborted due to unexpectedly low offers from bidders. KORES is pushing for a retender.
KORES held the tender on Aug. 8 to sell its 10 percent stake in the Cobre Panama copper mine, but the offers from Japanese, Chinese and Canadian bidders were much lower than the price the corporation determined based on third-party valuation.
The Cobre Panama copper mine project has attracted a total US$6.30 billion (7.70 trillion won) investment from overseas investors, the largest ever amount for Panama. The South Korean consortium consisting of KORES and LS-Nikko Copper bought a 20 percent interest in the project in 2012, and LS-Nikko Copper sold its 10 percent stake to First Quantum Minerals, the operator of the mine, in 2017.
After the Steering Committee of Public Institutions announced a plan in March last year to sell off overseas assets held by state-run resource development corporations, KORES has made preparations for the tender. However, experts worried that tender participants would offer low prices as the government scrambled to push ahead with the sales without considering profitability at that time, and those worries have become a reality.
Accordingly, industry insiders point out that the government should revise its policy to sell off overseas assets. KORES is planning to announce a retender within this month and expedite the sale procedure in accordance with the National Contract Law.
The Cobre Panama copper mine ranks 10th in the world in terms of output. Production at the mine has been rapidly stabilizing following trial production in February. It is expected to produce more than 400,000 tons of copper in 2023.