Korea invests in rare earth resources mine in S. Africa

Korea invests in rare earth resources mine in S. Africa. December. 05, 2011 03:06. imsun@donga.com.

The Korea Resources Corp. will begin developing rare earth resources abroad. Such rare metals are called "industrial vitamins" that are being disputed among countries as they are necessary for the production of TVs or electric cars.

The corporation said Sunday, "We have signed a contract to acquire a 10-percent of a project to develop a rare earth mine in South Africa." The Zandkopsdrift mine is located in South Africa`s western Namaqualand region and is estimated to have 39 million tons of rare earth metals.

"The mine is in the stage of precision exploration and the project is to produce 20,000 tons of rare earth resources every year from 2016," it added.

The 10-percent share in the mine will help Korea secure 2,000 tons of rare earth metals a year, equivalent to 60 percent of annual domestic demand for the resources of 3,300 tons.

"We are now under negotiation with Frontier Rare Earth, the developer of the mine, to increase our share up to 30 percent," the corporation said. "The securing of the additional shares will increase the acquisition fund to 25 million to 60 million U.S. dollars.”

To participate in the project, the corporation will form a consortium of five Korean companies: Hyundai Motor, Samsung C&T Corp., GS Caltex Corp., Daewoo Shipbuilding & Marine Engineering and Aju Corp.

The resources company said, "They are either directly conducting resources development projects or needing rare earth metals for the production of their products. We have signed memorandums of understanding with these companies and will seal official agreements with them by early next year.”

Korea has carried projects to turn rare earth resources into materials in China and Mongolia, but this is the first time for Korea to directly develop a rare earth mine. The intensifying global war of resources as seen in the diplomatic row between China and Japan over rare earth resources last year has prompted Korea to belatedly join the development of rare earth mines.

The resources company said, "China accounts for 97 percent of global production of rare earth metals. China`s pursuit of turning resources into arms has resulted in the control of exports of rare earth resources." "The acquisition of shares in the South African mine will help Korea reduce its dependence on China."

As of November this year, the price of a ton of rare earth metals was 123,000 dollars, up 12-fold from two years ago.