Posted January. 20, 2013 05:10,
With the incoming administration allegedly neglecting the development of overseas natural resources, Korea Resources Corp. is considering pulling out of a lucrative project to develop the Corocoro copper mine in Bolivia.
The project is the largest of its kind for Korea, and was secured by the state-run corporation by forming a consortium with four Korean companies. If the resources corporation withdraws from the project, which has an estimated worth of 2 billion U.S. dollars, it will likely have a negative effect on another venture in Bolivia to develop lithium mines, which are considered one of the most successful projects in overseas natural resource development initiated by the outgoing Lee Myung-bak administration.
According to sources in the energy and resources industries Friday, Korea Resources Corp. is actively considering pulling out of the Corocoro project. Developers have been known to cancel in the course of exploration if a project is deemed economically non-viable, and the Korean company has such an opinion of the copper mine venture. Former and incumbent officials in charge of the project deny this, however, with one saying, If Korea invests about 200 billion won (189 million U.S. dollars) into it, it can rake in profits of 2.5 trillion won (2.36 billion dollars) in several years.
Apart from the assessment of economic viability, another reason to pull out of the project is the political risk. The resources company says it cannot rule out the possibility that Bolivian President Evo Morales, who has strong nationalist ideas for natural resources, could seek to nationalize the Corocoro mine.
When the contract for the project was signed, the Knowledge Economy Ministry said, Korea concluded a contract advantageous to itself without undergoing an open international bid in a Latin American country, where nationalism for natural resources is very strong. This means the government was well aware of the political situation in Latin America when it embarked on the project.