DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/dd2199/south_korea_mining)
has announced the addition of the "South
Korea Mining Report Q1 2010" report to their offering.
South Korea Mining Report provides industry professionals and
strategists, corporate analysts, mining associations, government
departments and regulatory bodies with independent forecasts and
competitive intelligence on South Korea's mining industry.
With South Korea heavily dependent on third party sources for resources
and raw materials, the government, as well as private companies, are
looking for protection against future price fluctuations through
overseas acquisitions in mine and mining facilities. Indeed, in
September 2009, state-run Korea Resources Corp stated that it was in
talks and was considering purchasing an equity share in Canada's Inmet
Mining Corp. Korea Resources announced that a strategic alliance
agreement had been signed, but no details about the size of the stake
had been finalised. As the sixth largest importer of copper in the
world, South Korea is very keen to secure supplies of the metal and
increase its self-sufficiency for this vital commodity. To this end, at
the end of October 2009, Korea Resources signed an option agreement for
a 20% stake in Inmet Mining's Petaquilla Panama mine, along with fellow
Korean firm LS-Nikko. The mine is thought to contain 1bn tonnes of
copper.
A further example of this was seen in September 2009, when Korea
Electric Power Corp (KEPCO) released a report announcing its intentions
to have independent sources of raw materials account for 16% of supply
by 2012. The company plans to achieve this through the acquisition of
uranium and coal assets in overseas markets. The plan will begin in
2010, with KEPCO taking an equity share in a soft coal mine in the US
and a uranium mine in Namibia. The company wants to expand its footprint
overseas in order to diversify away from the waning domestic energy
market and concentrate on other industrialised countries where demand is
rising.
Meanwhile, in December 2009, in the biggest foreign investment deal of
the quarter, South Korean steel giant Pohang Iron & Steel Co (POSCO)
announced that it had agreed a US$5bn joint venture with Indonesia's
Krakatau Steel to construct a steel plate plant. The facility to be
located in Indonesia's Bantem Province is expected to have an output
capacity of 2.6-3.1mn tonnes per year, which would contribute
significantly to Krakatau achieving its production goals of 5mn tonnes a
year. The investment comes as the market recovers, and increasing metals
prices and rising demand are subsequently giving investors confidence in
new projects. Meanwhile, in September 2009, it was announced that a unit
of POSCO POSCO Engineering and Construction would be issuing shares in a
domestic initial public offering (IPO). The total issuance of shares was
expected to raise between KRW898.7bn and KRW988.6bn, with the additional
funding reportedly to be used for infrastructure construction within the
unit. However, as the date of the IPO grew closer, the reception to the
offering cooled, with analysts feeling that the price range for the
company was too high in light of the struggling market conditions. The
company was planning a share offering of between KRW100,000-120,000
however it was indicated that the IPO offering would actually be closer
to KRW80,000-90,000, much lower than the company was willing to go. As a
result, POSCO Engineering & Construction cancelled the IPO with a view
to relaunch when the markets recover.
Mining forecast
The authors believe that South Korea will not be as badly impacted by
the global slump in the mining industry as some nations, because it
relies heavily on imports for raw materials. As a result, many South
Korean metals producers are taking the opportunity to agree low-cost
tenders for raw materials. For example, in June 2009, five power
utilities confirmed a 45% reduction in prices for thermal coal with
Chinese suppliers. South Korean based Korean Resources Corporation
(Kores) and Daewoo International also agreed to purchase a 7.5% share in
a soft coal mine in Australia as a means to secure 1.5mn tonnes of
bituminous coal annually. According to industry observers, the current
landscape is similar to that witnessed in the aftermath of the Asian
financial crisis, when many resources were sold cheaply and developed
countries competed aggressively to acquire them. The current strategy
for South Korean companies is to purchase mining areas that are known to
be productive, rather than taking risks on new, unexploited areas. There
are approximately 21 South Korean government agencies investigating the
possibilities of developing natural resources in countries such as
Cameroon, Congo and Kyrgyzstan. Meanwhile, Kazakhstan which is selling
assets in order to meets it current financial difficulties could be
another promising target. After falling by 16.2% in 2008, the authors
believe that the South Korean mining market will bounce back strongly in
2009, with growth of 26.63% projected. After that, more steady growth is
expected and the report forecasts that the mining market will be worth
KRW4.221bntrn (US$4.22bnbn) in 2014.
Key Topics Covered:
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Executive Summary
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SWOT Analysis
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Special Focus: Outlook For Global Mining
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Industry Trends And Developments
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Key Projects
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Business Environment
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Political Risk Analysis
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Industry Forecast Scenario
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Competitive Landscape
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Company Monitor
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Appendices
Companies Mentioned:
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LS-Nikko Copper
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Oriental Minerals
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Poongsan Holdings Corporation
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POSCO
For more information visit http://www.researchandmarkets.com/research/dd2199/south_korea_mining