State-run Korea Resources (Kores) said on Thursday that it was looking closely at investing in several mines in Africa this year, expecting minerals prices pick up next year along with the global economy.
Kores president Kim Shin-jong said in a written interview with Reuters on Thursday that the company would use part of the proceeds from its recent $300-million bond sale to finance the investments.
“Although the timing is not as good as last year, this year is still good for investment. Next year we may not have opportunities to acquire new mines as minerals prices are projected to recover along with the economy,” said Kim, who has more than 30 years experience in resources development.
Kores, which has investments in 30 resource exploration, development and production projects in 12 countries, was interested in investing in South Africa, Mozambique, Namibia, Congo, Niger and Zambia, he said.
Kores was seeking potential exploration opportunities for coal, uranium, copper and manganese, he added, saying: “We are interested in several mines in Africa, although we cannot yet confirm any acquisitions.”
Chinese rivals
Kim said part of the proceeds from the recent bond issuance would be invested in the Ambatovy nickel project in Madagascar, in which Kores acquired a 22,5% stake in 2006.
He added that the company had no plan to issue another dollar bond this year.
Last month, Kores sold a $300-million bond due in 2015. The issue drew $2,6-billion in orders, with Asian investors taking the bulk of the debt sold.
While Kores planned to keep its debt-to-equity ratio below 100% over the long term, Kim said the company would diversify ways to raise money by selling some assets, such as partial stakes in the Ambatovy project, and resource development funds, as well as spending profit from its investments.
On the company’s strategy with regard to aggressive, cash-rich Chinese competitors, Kim said: “It is obvious we cannot match Chinese financial capacity and investment size. But we can provide world-class technology in setting up information technology, infrastructure and power systems, making us more suitable for offering package deals providing infrastructure in resource-rich countries.”
He added that Kores would continue to bid in consortiums with local private companies to hedge against risks.
South Korea, Asia’s fourth-largest economy, said in April that private and public investments, including those by Kores, in six major minerals were estimated to reach $1,3-billion this year, up 22% from last year.
Heavily dependent on energy and resource imports, South Korea consumes 2,69-million tonnes of non-ferrous metals per year, making it the world’s sixth-largest consumer, according to government data. – Reuters