Posted : 2013-06-27 17:22
Updated : 2013-06-27 17:22

LG expands global natural resource biz

Seen above is an oil well platform located at West Bukha, Oman's first offshore oil field. LG International owns a 50 percent stake in the field. The firm increased the oil field's production capacity to 17,000 barrels last year from the previous 15,000. / Courtesy of LG International

By Park Ji-won

LG International (LGI) is continuing to expand its operations around the world.

In May 2012, LGI, the natural resource and industrial materials affiliate of LG Group, obtained the rights to run a bituminous coal mine in Indonesia. As recently as last December, the company bought a 20 percent stake in petroleum firm GeoPark Colombia.
GeopPark Colombia is a subsidiary of GeoPark, an oil developing company headquartered in Argentina.

The firm plans to continuously expand its operations in Latin America, aiming to acquire natural resources and build infrastructure, according to an LG official.

GeoPark Colombia owns a total of 10 oil blocks in Colombia, seven of which are being drilled and three, explored. Llanos, in the north-central part of Colombia, is where most of GeoPark's oil blocks are, and is the largest oil-production district with a total of 80 fields. The district is 200,000 square kilometers in area, twice that of South Korea.

The company is building an oil pipeline after Argentina implemented a national policy that is expected to lower costs to developers such as LGI.

On Jul. 1, 2012, LGI announced it signed an agreement to acquire a 60 percent stake in the GAM, or PT.Ganda Alam Makmur, an operator of coal mine, bituminous coal mine in eastern Kalimantan, Indonesia for 242.8 billion won ($210 million).

The deal gives LGI exclusive managerial and marketing rights for the entire operation. Accordingly, LG will operate two bituminous coal mines including the MPP, or PT.Mega Prima Persada a mine company. This deal could make LGI a major coal supplier in Indonesia according to the firm.

Another LGI official announced the firm will make significant efforts to establish eastern Kalimantan as a major coal mining area. It will also create a distribution channel in Indonesia.

The large open-pit GAM bituminous coal mine covers an area of 106 square kilometers with reserves of over 500 million tons of coal, about five times South Korea's annual coal consumption.

The firm will begin pilot production within a year and expects annual production to reach 12 million tons. The mine's maximum capacity is 14 million tons.

It is also expanding to the green energy business, where it currently operates a palm oil farm in Sekadau, Indonesia. The farm produces 40,000 tons of crude palm oil annually and aims to increase production to 80,000 tons within a few years.

LGI contracted a total of 160 square kilometers of palm oil farms, in which it also conducts land-use and tree-planting. Since 2009, forestation, which is necessary for wood chip and wood pellet making, has been one of Indonesia's growth engines.

The firm signed a memorandum of understanding with a leading rare earth element producer in China last year to boost its global green energy business. Rare earth elements refer to seventeen chemical elements that have broad uses.

Last year, the firm announced it will solidify its foundation to become a global leader in natural resource production in two years by actively developing its facilities.

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