Bilateral Cooperation between Korea and Mongolia in Mineral
Bilateral Cooperation between Korea and Mongolia in Mineral Resources Korea Resources Corp.
Table of contents I Korea’s overseas mineral development II What is KORES? III Mining projects in Mongolia IV Doing business in Mongolia V Proposed cooperation plan Korea Resources Corp.
I. Korea’s overseas mineral development World’s No. 5 manufacturer after China, Germany, U. S. & India Major consumer of minerals, importing 94. 6% of needed minerals including coal Import amount in 2014: 29 billion USD 2013 country manufacturing competitiveness index Rank Country Index score 1 China 10. 00 2 Germany 7. 98 3 USA 7. 84 4 India 7. 65 5 South Korea 7. 59 6 Taiwan 7. 57 7 Canada 7. 24 8 Brazil 7. 13 Demand & Imports of Korea(2014) Section 2014 Total Mineral Coal Demand (million US$) 302, 358 180, 361 121, 997 Import (million US$) 293, 187 173, 126 120, 060 Self-sufficiency rate (%) 5. 4 8. 0 1. 6 Rate of dependence on import (%) 94. 6 92 98. 4 * Mineral resources : included metal & nonmetal Korea Resources Corp.
I. Korea’s overseas mineral development Pursued 519 projects with 61 countries in 39 diversified commodities since 1977 345 projects in progress Cumulative investment amount: 15. 926 billion USD General table of all projects in 2014 Ongoing projects Section Exploration Development Production Subtotal Finished projects Total Projects 161 109 75 345 174 519 Investment (million US$) 1, 362 4, 631 8, 727 14, 720 1, 206 15, 926 Commodity 23 33 17 38 21 39 Countries 38 34 19 50 41 61 Korea Resources Corp.
I. Korea’s overseas mineral development Successful case study: Pasir Coal Mine in Indonesia Category Contents Notes Location East Kalimantan About 1, 300 km west of Balikpapan Shareholders SAMTAN 49%, Indika 46%, Muji 5% Indonesian partners Mining area 50, 921 hectare 2/3 of size of Jakarta Coal reserves 1, 376 mil. tons As of end of 2013 Mining potential 651 mil. tons As of end of 2013 Annual production 40 mil. tons As of 2011 Accumulated output volume 350 mil. tons Since 1993 Korea Resources Corp.
I. Korea’s overseas mineral development Focusing on 6 strategic minerals and 2 new strategic minerals NEW strategic minerals Selection criteria: 1) Ores 90% of whose domestic demand comes from imports 2) Ores with annual imports exceeding 100 million USD 3) Ores that can be processed or used at domestic facilities B. C Fe U Zn Ni Selection criteria: Minerals with high connectivity to new ventures & forecast of high demand Li REE Cu Main task of Korean gov’t: Secure stable supply of mineral resources Korea Resources Corp.
II. What is KORES? Korea Resources Corporation (KORES) is a wholly owned government body set up in 1967 to specialize in mining. In 2008, KORES was changed to a direct investor from a promotion agency. 1967 ‘Incorporation’ Promotion Agency Major Business Activities 2008 ‘Quantum Jump’ Direct Investor ← Exploration & Development of Mineral Resources ← Providing Technical & Financial Support ← Stockpiling of Rare Metals ← Research & Development Korea Resources Corp.
II. What is KORES? KORES has direct investment in 32 projects (11 exp. , 8 dev. , 13 prod. stages) Operating 9 overseas offices including one in Mongolia Cree-East (U) Erdenet (Cu) Shakespeare (Cu, Ni) Capstone (Zn) Qingshan (REM) Rosemont (Zn) Zizn Maxun (REM) Boleo (Cu) Teguidda (Uranium) Houaphanh (Zn) Cobre Panama(Cu) Rapurapu (Cu) Kapuas (Coal) Mkuze (Uranium) Marcona (Cu) Narrabri (Coal) Ambatovy (Ni) NX Uno (Li) Santo Domingo (Cu) Zhangjiagang (Limestone) Sal de Vida(Li) Vlakplaats (Coal) Minerva (Coal) Athena (Coal) Cockatoo (Coal) Togara North (Coal) Moolarben (Coal) Zandkopsdrift (REM) Marree (Uranium) Wyong (Coal) Spring Vale (Coal) Angus Place (Coal) Korea Resources Corp.
Australia, Springvale Coal. Project Location: Australia Owners : Banpu (50%) Korea Resources Corp. (25%) SK Energy (25%) Development Stage: Production Cost: US$ 220 million Capacity: 3. 3 Mmllion tons/year Mining method: Longwall mining Reserves: 50 million tons (thermal coal) Expected Mine Life : Until 2030
Madagascar, Ambatovy Nickel Project Location: Madagascar Owners : Sherritt International (40%) Korea Resources Corp. (27. 5%) Process Plant Sumitomo (27. 5%) SNC-Lavalin (5%) Development Stage: Production Cost: US$ 5. 5 billion First Metal: Q 1 2012 Reserves: 78. 4 million tons (Ni 0. 94%) Production Scale: Ni metal 60, 000 tons/year No. of working years: 29 Antananarivo Mine Site
III. Mining projects in Mongolia Korea has had 69 mining projects in Mongolia centered on private companies; only 19 projectsare ongoing, most gold mines are being run by small to medium-size Korean private companies. Section Projects Commodity Projects Ongoing projects Exploration 12 Gold 25 Development 4 Soft coal 12 Production 3 Fluorite 10 Abandoned 37 Copper 8 Finished 13 Others 14 Total 69 No successful mining project yet in Mongolia Korea Resources Corp.
IV. Pros & Cons of doing business in Mongolia PROS CONS NEEDS World’s 7 th most resource-rich nation Abundant deposits of minerals Landlocked, lack of consumption & infra High reliance on 3 C, high policy risk Promote more foreign investment in Mongolian mining sector to boost Mongolia’s economic development
V. Proposed Cooperation Plan I. Mid to long-term cooperation Formation of general business model for mining industry involving all processes Geology Mining Production Metallurgy Marketing Infrastructure KORES and Mineral Resources Authority of Mongolia KORES and Erdenes Mongolia KORES and private companies Private companies of both countries Construction companies and Mongolian Government • Geological survey • Mine plan • Production plan • Processing method • Market research • Resources estimation • Cost analysis • Produce mineral • Refinery process • Consumer analysis • Construction of railways & roads • Grade control • Economic evaluation • Logistics study leading to mines products 3 • Recovery control Korea Resources Corp.
Internationally Competitive Business Model (ICBM) Studied by KORES and Erdenes MGL since 2014 • Scope of Works Step Status analysis Market trends Status of Mongolia mineral resources Development status In Mongolia Implications Construction of ICBM Concept of ICBM Design of ICBM (reserves, production, plants, infra, Etc. ) Analysis of effect Application of ICBM Case A(copper) Case B(Iron) Role of each country (Korea and Mongolia) Highest potential for future cooperation found in joint development of copper mines
V. Proposed Cooperation Plan II. Short-term cooperation - Push for joint exploration in promising complex ore projects * E. g. , pursue exploration to draw up geological map with Mongolian partners Partnership Building Seeking major interest from and cooperation of Mongolian government in cooperation for mineral resource promotion Korea Resources Corp.
Thank you very much. Korea Resources Corp.
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