Korea Mine Rehabilitation and Mineral Resources Corp. said it has effectively ended an overseas resource development project after investing more than 3 trillion won, selling its Mexico mining interests for a total of $2. The exit amounts to a withdrawal without recovering its investment after years of accumulated losses.
The agency said Thursday it sold all of its equity stake and bonds in the Boleo copper mine in Mexico on Nov. 27 last year for $1 each, or $2 in total. While structured as a sale, the transaction was closer to a transfer of liabilities, with the buyer taking on the remaining debt, it said.
The Boleo mine, a large project involving key minerals such as copper and cobalt, initially drew high expectations. But weak geological conditions, local political and social risks, and high production costs led to annual losses of hundreds of billions of won, the agency said.
In 2022, it decided that confirming losses through a sale was more reasonable than making additional investments. The deal was completed after three failed auctions.
The sale reduced debt by about 849 billion won and slightly improved capital, the agency said, but the investment is viewed as an almost total loss in terms of recovery.
Critics say the case highlights structural limits, noting that only a limited number of the agency’s overseas resource development projects have generated profits. Only some projects are known to have increased in asset value among the overall investments.
Some in the industry said the outcome points to the need to reassess public-led overseas resource development strategies. A resource development industry official called it “a typical case where risk assessment at the exploration stage and withdrawal standards were insufficient.”
The government is reviewing an expanded role for the agency to secure critical minerals such as rare earths, but concerns persist that similar problems could recur without stronger expertise and independence.
* This article has been translated by AI.
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