KRC Forced to Sell off Lucrative Mines

Korea Resources Corp.’s copper mine in Panama

Korea Resources Corp. has recently submitted a report on its overseas resources development projects to the government. According to the report, the total current value of the corporation’s copper mines in Panama is US$1.03 billion. There, the corporation has invested US$759.9 million and recouped US$127 million. The corporation is expected to recoup 150 percent of its investment there, which means its profits can be larger when it keeps running the mines than when it disposes of them at giveaway prices.

The current value of its Ambatovy nickel mine in Madagascar is US$526 million and that of its Boleo copper mine in Mexico is US$665 million. According to the corporation, continuous operations in the mines can be more profitable than disposal if its local investments that were made years ago are regarded as sunk costs. “Especially, the Ambatovy mine produces nickel, a key material for electric vehicle batteries, and thus its value is likely to continue to increase,” it explained, adding, “In addition, the strategic value of the mine in terms of national security is very high.” Bloomberg recently reported that the international nickel price would reach US$17,373 per ton in 2024, which is approximately 40 percent higher than the current price.

Still, the South Korean government is telling the corporation to dispose of all of its overseas assets, even if profitable, so its financial conditions can be improved. Besides, more lucrative assets such as the copper mines in Panama are on the top of the government’s priority list assuming another global economic recession.

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