KORES to Start Uranium Exploration in Tanzania

The state-run resources explorer gains ground in securing rare earth

Korea Resources Corporation (KORES) signed a contract with Australia-based East Africa Resources to acquire a 50 percent stake in the Tanzanian Mkuju South uranium project on Dec. 28 at the COEX InterContinental Hotel in southern Seoul. East Africa Resources, the holder of the mining rights, will take the remaining 50 percent stake. KORES will invest 4 billion won for the joint prospection with the Australian company for two years, and after that the two companies each will shoulder up to $100 million for mining costs with the goal of launching uranium production in 2019. The Mkuju uranium mining area, located in the Karoo Basin, Tanzania's most uranium-rich area, has a high possibility for development.
KORES President & CEO Kim Shin-jong said, "If the Tanzanian uranium exploration project is a success, Korea will attain the goal of raising its own uranium development rate to 30 percent, and the latest project involving solely KORES will serve as an opportunity for KORES to enhance its uranium exploration and technology capabilities."

Korea has gained ground in the global race to secure rare earth elements as KORES has signed a deal to participate in a large-scale rare earth element development project in South Africa. KORES reached the agreement to secure a 10 percent share in the Zandkopsdrift rare earth element mining project in South Africa's western Namaqualand region with the Toronto, Ontario-based miner, Frontier Rare Earths, in Johannesburg on Dec. 1. The agreement has an option that could raise KORES' stake to 30 percent.
The Zandkopsdrift rare earth element mine is a large-scale pit with rare earth deposits amounting to an estimated 39 million tons. The mine is set to produce 20,000 tons of rare earth elements annually starting in 2016. Under the agreement, Korea will be able to secure 6,000 tons of rare earth elements per year twice Korea's annual demand. Hyundai Motor, Samsung C&T, GS Caltex, Daewoo Shipbuilding & Marine Engineering and Aju Industry Co. signed an MOU to join KORES in the mining project. The deal would give Korea some room for maneuvering against China's dominance in the global rare earth element supply market, Korean industrial analysts said. China, which accounts for some 95 percent of the world's rare earth element supply, reduced its rare earth export quotas in 2010 by 40 percent compared to the previous year and raised exporting tariffs on some rare earth elements. This past July, the World Trade Organization (WTO) ruled that China is in violation of WTO regulations against restrictions on exporting raw materials, siding with the plaintiffs, the United States and the European Union.
KORES President Kim said, "Prices of rare resources such as rare earth elements can skyrocket the moment the balance of supply and demand collapses." He cited the possibility that the production of major exports could be stopped in the worst-case scenario unless Korea's dependence on foreign countries for major mineral resources is solved.

KORES is seeking to forge an alliance with Mintek, South Africa's national mineral research organization, so that the Korean state-run corporation can secure technology ranging from the production of rare earth elements and processing to the construction of a smelting plant in Africa. KORES President Kim said China's restrictions on the exporting of rare earth elements in its strategy of weaponizing resources have grave consequences, and KORES' investment in the project has given Korea an opportunity to wean Korea off its dependence on China for rare earth elements.
Mintex is one of the world's leading technology organizations specializing in mineral processing, extractive metallurgy, and related areas. Working closely with industry and other R&D institutions, Mintek provides service test work, process development and optimization, consulting and innovative products to clients worldwide. Mintex once suffered hardships in its production and research of rare earth elements as China was supplying rare earth elements at cheap prices in the global market, forcing the closures of some South African rare earth mines.

Established in 1967, KORES was charged with providing financial and technological support in the operation of privately-owned mines and mine prospection. However, as securing natural resources overseas is becoming ever more significant, KORES has transformed itself into a specialized resources explorer. It was on Dec. 26, 2008 that KORES was given a new mission of exploring for natural resources on its own as the result of a revision of the Public Enterprise Act and its articles of association. Currently, KORES is engaged in 35 overseas resources development projects in 15 countries, including 11 production and development projects and the remaining 13 projects related to prospecting.
KORES, under the stewardship of President Kim, has been pulling out all the stops to explore for resources overseas since 2009 by adopting the "2+2 Strategy," focusing on two natural resources, copper and uranium, and two continents, South America and Africa. The strategy is designed to maximize outcomes in order to adopt dramatic choice and concentration despite the stark reality of limited financial resources and manpower. CEO Kim has been repeatedly stressing that his staff must be armed with a challenging spirit like that of a venture company CEO, according to the strategy he proposed. nw

KORES President & CEO Kim Shin-jong shakes hands with East Africa Resources Chairman
Louis Coetzee after signing a deal on the Tanzanian Mkuju South uranium project in Seoul on Dec.28.

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