South Korea plans worldwide mine development

Korea Resources Corporation (KORES) is launching a $279.1 million fund in October of this year, to invest in a nickel mine in Madagascar.

The move is the first by the Korean company in support of the country’s plans to develop mines worldwide.

The fund will be managed by UBS Hana Asset Management Company Ltd, which is majority owned by UBS AG, the Swiss investment bank.

Global demand for nickel, which is used as a steelmaking additive, is currently weak but KORES is confident that the fund will be profitable as nickel prices are still high compared with the 2003 average.

Also, production costs at the nickel mine in Ambatovy, Madagascar, will be approximately 30% of other nickel mines.

The mine is estimated to have 125 million tonnes of nickel ore, and production is expected to reach up to 60,000 tonnes a year from 2010.

South Korea, which is Asia’s fourth-largest economy, has plans to launch a number of raw material development funds over the next five years, to secure overseas mineral supplies.

The country has low levels of some natural resources and plans to develop mines to supply 38% of its industrial metals requirements from Korean-owned mines by 2016, thus making it less vulnerable to fluctuations in global metal prices.