Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) sold the Boleo copper mine in Mexico, into which more than 3 trillion won had been injected, to corporations based in Mexico and the United States for $1 each. With virtually no recovery proceeds, the sale locked in the investment loss.
Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) disclosed on Apr. 30 that it had sold all shares and bonds of the Boleo mine held by the corporation and its affiliates to corporations based in Mexico and the United States for $1 each, totaling $2, effective Nov. 27 last year.
For this sale, the minimum nominal price of $1 was set as the sale price to avoid tax risks associated with a free transfer. The buyer assumes all remaining liability.
The corporation began investing in the Boleo mine in 2008. As part of resource diplomacy under the Lee Myung-bak administration, a consortium formed by the then Korea Resources Corporation (KORES) and domestic corporations joined the investment. After the Canadian corporation Baja Mining faced bankruptcy risk in 2012, Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) acquired additional equity and secured management control.
The Boleo mine is known to hold about 150 million tons of copper, cobalt and zinc reserves. During that time, Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) built dedicated port facilities, a smelter and a power plant at the Boleo mine, but could not avoid losses. In the end, the Overseas Asset Management Committee decided in June 2022 to sell.
Right before the sale, Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) held 94.21% equity in the Boleo mine. Through this sale, liability decreased by 849 billion won and capital increased by 686.7 billion won, improving the financial structure.
However, because the more than 3 trillion won invested ultimately was not recovered, controversy is expected over the usefulness of overseas resource development.
Of the 33 projects in which Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) invested, only seven, including Kangwon Land, saw their asset values increase.