By Kim Tae-gyu
Korea has failed to recoup even half its investments in overseas resources over the past three decades and things have not improved under the incumbent Lee Myung-bak administration. The nation has spent heavily on exploring and developing overseas mines for various natural resources with the aim of raising the nation’s self-sufficiency ratio.
According to data from the Ministry of Knowledge Economy (MKE) presented to the National Assembly for parliamentary inspection Monday, the country has spent $8.53 billion in 419 offshore resource development ventures since 1977. Only $3.62 billion has been recovered, to mark 42.4 percent of the total. In consideration of the fact that more than 200 projects have already finished, the eventual recovery rate is not likely to near 100 percent.
In spite of the current government’s all-out efforts to tap into global mines, the recovery ratio still remains at rock bottom as amply demonstrated by the 2010 performances.
The country carried out 270 projects in the international development of natural resources such as crude oil, coal and other minerals and a mere 6.3 percent, or 17 cases proved to be successful.
A total of 100 programs were terminated due to a lack of commercial viability and many of the remaining 153 underway are not expected to produce substantive results.
``Even the world’s top-tier players are happy with a 30-percent success rate in natural resources projects in other countries and the rate is typically good enough to make up for losses of the 70-percent failures,’’ a Seoul analyst said.
``In contrast, Korea’s success ratio is too low to cover the losses in other areas. We are required to check the feasibility of various endeavors from scratch in order not to lose money.’’
The bottom line was better for initiatives partially financed by the government as 24.59 percent were successful last year.
The government’s ``resource diplomacy’’ fared no better, failing to chalk up a major breakthrough in attaining its long-term goal of substantially raising the self-sufficiency ratio for natural resources.
Rep. Cho Kyung-tae from the main opposition Democratic Party cited MKE data that the Lee administration has signed as many as 30 memorandums of understanding (MOU) to develop such minerals as uranium, gas, oil and magnesium in Australia, Uzbekistan, Kazakhstan and South American states.
Of the 30, nine have already fallen through for unknown reasons and four of the nine failures were signed by President Lee himself.
``In order to publicize achievements for resource diplomacy, the government seems to have pushed for too many projects without proper in-depth studies and research,’’ Cho said.