South Korea Mining Report Q4 2010

Date: October 22, 2010
Pages: 86
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download

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Korean’s industrial sector is resource-hungry and requires materials in quantities far greater than it can produce from its domestic mining industry. As a result, it has been extremely active around the world in attempting to secure the long term resources to feed its factories. In this search it has had to compete with other resource consuming nations chiefly China and Japan. BMI believes that Korea will be successful in its resource acquisition strategy due to the availability of funds, well managed companies experienced in international business and the support of a proactive government with a clear vision of what is required for the future economic well being of the nation.

The Korean government has been pursuing the resource security policy through a series of Free Trade Agreements (FTA) and bilateral intergovernmental talks. An FTA with Peru could be finalised as early as November which should secure supplies of gold, zinc and tin as well as other minerals in the resource rich South American country. Advanced talks are also proceeding regarding an FTA with Australia, while in August a bilateral agreement with Bolivia will provide vast quantities of lithium for batteries for Korean electronic goods.

Government-owned Korea Resources (Kores) is leading the way with overseas mining acquisitions. The company has indicated that it will increase its acquisition spending in 2010 by over 80%, setting aside US$500mn to secure essential supplies of coal, copper and uranium. The company is operating projects in 12 countries specifically targeting African and South American resources.

Kores is also involved in a consortium led by Korea Electric Power Corp (KEPCO) which has acquired five Australian coal fields worth a total of US$488.2mn. Another major acquisition in Q410 is the purchase of a mine in Peru by Korea Zinc for US$47.5mn. Meanwhile, SK Networks are currently negotiating a massive US$700mn investment in Brazilian iron ore producer MMX Mineracao & Metalicos SA which could secure up to 17% of Korea’s annual iron ore requirements.

The steel-making giant POSCO is also making progress and is hopeful that the long running saga of its planned US$12bn steel plant in Orissa should be resolved soon. Meanwhile, POSCO’s US$3.3bn joint venture (JV) steel mill with Indian state-owned Steel Authority of India Limited (SAIL) is likely to be signed in Q410. South Korea’s July steel production was up 16.2% on the same month in 2009, with August showing a 6.4% increase. However, after reporting excellent Q210 earnings POSCO is more pessimistic about the results in H210, fearing that high ore prices and a slowing of demand may lead to a profit fall of up to 30%. Mining Forecast

BMI forecasts that while the Korean mining industry has improved in Q310, the rate of growth is stable and there is unlikely to be any unexpected growth spurts in the coming years. We forecast that by the end of 2010, the industry value will have increased to US$2.98bn and will continue to grow until 2014 when we expect the total industry value to reach US$4.26bn.
Executive Summary
SWOT Analysis
South Korea Political SWOT
South Korea Economic SWOT
South Korea Business Environment SWOT
Global Mining Outlook
    Table: Rio Tinto’s Capital And Major Evaluation Projects For 2010
BMI Views
Risks To Outlook
Industry Trends And Developments
Market Overview
    Table: Mines In South Korea
Latest Developments
Regulatory Structure And Developments
Key Projects
Lead, Zinc And Silver
Business Environment
Asia Pacific Mining Business Environment
    Table: Asia Pacific Mining Business Environment Ratings
Limits Of Potential Returns
Risks To Realisation Of Returns
Legal Framework
    Table: BMI’s Legal Framework Ratings
Labour Force
    Table: South Korean Demographic Indicators, 2000-2030
Foreign Investment Policy
    Table: South Korea’s Annual FDI Inflows, 2000-2006
    Table: Asia’s FDI Inflows, 2005 & 2006
Political Risk Analysis
Poor Election Showing Bodes Badly For GNP
Foreign Policy
Long-Term Political Outlook
Threats And Challenges To Stability
Scenarios For Constitutional Reform
Commodities Forecasts
    Table: BMI’s Nickel Forecasts
    Table: Global Nickel Statistics, 2005-2014
    Table: BMI’s Aluminium Forecasts
    Table: Global Aluminium Statistics, 2005-2011
    Table: BMI’s Lead Forecasts
    Table: Global Lead Statistics, 2005-2011
    Table: BMI’s Zinc Forecasts
    Table: Global Zinc Statistics, 2005-2011
    Table: BMI’s Copper Forecasts
    Table: Global Copper Statistics, 2005-2011
Competitive Landscape
Company Monitor
LS-Nikko Copper
Woulfe Mining Corp (Formerly Oriental Minerals)
Poongsan Holdings Corporation
Global Assumptions Q410
    Table: Global Assumptions, 2009-2014
    Table: Global And Regional Real GDP Growth , 2009-2014 (% change y-o-y)
    Table: Exchange Rates, Selected Countries, 2009-2014 (annual average)
    Table: Real GDP Growth – Consensus Forecasts, 2010 And 2011 (% change y-o-y)
    Table: Selected Developed States’ Real GDP Growth, 2007-2012 (% change y-o-y)
    Table: Selected Emerging Markets’ GDP Growth, 2009-2012 (% change y-o-y)
Country Snapshot: South Korea Demographic Data
Section 1: Population
    Table: Demographic Indicators, 2005-2030
    Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
    Table: Education, 2002-2005
    Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
    Table: Employment Indicators, 2001-2006
    Table: Consumer Expenditure, 2000-2012 (US$)
    Table: Average Annual Wages, 2000-2012
Business Environment Ratings Methodology
    Table: Mining Business Environment Indicators
    Table: Weighting Of Components
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South Korea Mining Report Q1 2011 US$ 1,295.00 Jan, 2011 · 49 pages
South Korea Mining Report Q2 2011 US$ 1,295.00 Apr, 2011 · 62 pages
Metals & Mining in South Korea US$ 350.00 Jan, 2016 · 45 pages

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