State-run Korea Resources Corp. has embarked on a plan to sell its stake in a loss-making nickel mining joint venture in Madagascar, Africa, after the ruling Democratic Party put forward a motion to ban the cash-strapped institution’s direct investment in overseas projects.
The planned sale, announced early this month, would mean South Korea’s exit from one of the world’s three-largest nickel mines, at a time when demand for nickel, a core raw material for rechargeable batteries, is on the rise from the burgeoning electric vehicle (EV) industry.
Korea Resources has pumped 2.2 trillion won ($1.9 billion) in the joint venture (JV), Ambatovy, since acquiring a 33% stake in the venture in 2006.
In June, a ruling party lawmaker proposed a bill to restructure Korea Resources’ businesses and ban its direct overseas investments. If the bill is passed, the state-run agency will have to divest of existing mining projects, not only in Madagascar, but also copper mines in Mexico and Panama.
“After the bill was submitted again, we kicked off the process to sell our foreign projects,” said a source from Korea Resources.
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