KORES signs Greenland exploration deal
The Korean resources firm has agreed to work with NunaMinerals to look for joint rare earth and other strategic mineral projects
Posted: Monday , 10 Sep 2012
COPENHAGEN (Reuters) -
State-owned Korea Resources Corporation (KORES) has agreed to work with Greenland mining firm NunaMinerals to seek opportunities for joint minerals projects, exploiting deposits of rare earths and other strategic metals.
The deal, signed during a visit to Greenland by South Korean President Lee Myung-bak on Sunday, reflects growing Asian interest in the minerals of the North Atlantic island.
Greenland, a self-governing province of Denmark with 57,000 inhabitants, has some of the world's biggest deposits of rare earth elements, strategically important metals in which China has a near monopoly.
"We have had a lot of other Asian companies visiting us in the last few years, but this is the first concrete agreement," NunaMinerals chief executive Ole Christiansen told Reuters by phone from Nuuk, Greenland, where the company is based.
"KORES are trying to secure raw materials for the Korean industrial sector, and they have a list of commodities they want to work on worldwide," he added.
No money changed hands under the memorandum of understanding, which Copenhagen-listed NunaMinerals said in a statement could in the longer term result in cooperative agreements on a number of mineral projects.
"This (...) could end up anywhere - as something or nothing," Christiansen said. "They would be joint venture-type activities, as I read it now, but we are open to almost any kind of cooperation with KORES."
NunaMinerals has a broad exploration portfolio, including gold and copper prospects.
But Christiansen said that KORES mainly seemed interested in rare earth elements, tungsten and cobalt in Greenland. "They are looking mainly for base metals and specialty metals."
Rare earth elements are used in a wide variety of products from phones, televisions and cars to cruise missiles. Tungsten is another metal of which China is also the dominant producer and is used in auto manufacturing and in hard metals for mining and drilling.
Cobalt is used to produce high-strength steel alloys.
Analysts said interest in Greenland's rare earth elements was one of the reasons for a three-day visit to Denmark in June by Chinese President Hu Jintao, though Danish officials said Arctic minerals were not discussed.
London Mining, a firm backed by Chinese steelmakers, is seeking permission to construct an iron ore mine northeast of Nuuk at a cost of $2.35 billion that would be the biggest industrial development in Greenland if sanctioned.
During Lee's visit to Ilulissat on Greenland's scenic west coast, Greenlandic and South Korean officials discussed topics ranging from climate change, to Arctic shipping and scientific cooperation, including geology, Greenland's government said.
"South Korea has come to Greenland - and we have now established relations between our two countries," Greenland's Prime Minister Kuupik Kleist said in a statement. "The visit from South Korea is further evidence of Greenland's strengthened international profile."
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