How South Korea's Komir is securing mineral supply from LatAm

South Korea’s state-owned mine rehabilitation and resources corporation (Komir) has established a regional office in Santiago de Chile to provide integrated services, including technological development and environmental rehabilitation, and to facilitate business among companies from both countries.

BNamericas talks to Komir Chile’s head Wonseok Choi about the company’s services and mining projects, and about Chile's importance for South Korea’s economy.

BNamericas: What do you plan for Latin America’s mining industry?

Choi: Our main objective is to secure a stable supply chain of critical mineral resources for new industries. To this end, we’re seeking business opportunities to participate in promising projects for the whole life cycle and we’re providing various mining services, including technical review and B2B connections to South Korean private companies wishing to enter the regional mining market.

Komir Chile monitors mining policies and the market environment of each country in the region to support South Korean companies to strategically advance into the local market.

BNamericas: How do you evaluate Chile’s mining sector and what challenges does it pose?

Choi: Chile is an advanced country in mining development and possesses the world’s largest reserves and production of several minerals. The major challenge is to strengthen the value chain and capabilities in the mid- and downstream sectors so [Chile] can go beyond just producing and processing lithium and start producing battery parts and other products. In this respect, South Korea and Chile engage in complementary competitiveness. 

In addition, reducing water usage in the sector and improving the quality of mine drainage systems are important. The industry needs to focus on technological development. For this reason, DLE [direct lithium extraction] continues to become increasingly important for lithium production.

Tailings treatment is another challenge that needs to be addressed with caution. It is necessary to develop technological models that can add value by recovering valuable metals contained in tailings and prepare reasonable remediation plans to prevent losses or spills from tailings dumps that are piled up in a physically and chemically unstable state without appropriate measures.

In this regard, South Korea has advanced policies, technologies and experiences in mine rehabilitation, as well as the social and economic revitalization of abandoned mining areas. 

BNamericas: What aspects does the agreement Komir and national mining company Enami signed address?

Choi: As public organizations representing the mining industries of each country, we committed to promoting collaboration on sustainable mining and critical minerals value chains for South Korea and Chile. The two organizations will share information and experiences as strategic partners to conduct joint studies throughout the mine life cycle.

It is also expected that various cooperative projects will emerge during this process. 

BNamericas: How can Komir collaborate in exploration, production and mine rehabilitation? 

Choi: We support the exploration stage from early identification to development. In particular, we offer investment condition surveys, basic exploration, feasibility studies for stock acquisitions, etc.

For mining, we provide technological and financial support. Since 2017, we have been carrying out lending and releasing of mineral resources during supply and demand crises to address supply shortages, demand and price hikes. 

Regarding mine rehabilitation, we work on mine damage remediation and post-management, both for closed and operational mining areas. For example, as of 2021, South Korea had 5,475 abandoned and suspended mines, 60% of which caused environmental damage.

Komir has invested about US$1bn in mine rehabilitation from 2007 to 2021, including forest restoration, polluted water quality improvement, soil and tailings restoration, ground subsidence prevention, and others. 

BNamericas: What are Komir’s mining projects in Latin America? 

Choi: Komir is currently operating two mine development projects in Latin America. Boleo, in Baja California, Mexico, is owned and operated by Komir with a 77% interest. The copper mine comprises open pit and underground operations and produces 28,000t/y of copper cathodes.

Cobre Panamá is operated by Canadian company First Quantum and Komir owns 10%. This project has been producing copper concentrate with a capacity of 350,000t of copper equivalent per year since 2019. 

In Chile, we sold our interest in the Santo Domingo copper project last year and we were partners in the NX Uno lithium project with another South Korean company, but we sold it in 2019.

In Peru, Komir has provided official development assistance through international cooperation agency KOICA to the energy and mines ministry. Currently, we are implementing the second project, focused on [improving mine closure and environmental remediation], expected to remain in place through 2025 with an investment of US$6.4mn.

BNamericas: How will the commercial relationship between Chile and South Korea evolve this year?

Choi: The importance of critical minerals is growing as the energy transition is accelerating due to global efforts toward carbon neutrality and climate change mitigation.

According to the IEA, five times more critical minerals are required to produce an electric car than a conventional car. This makes securing a supply chain for critical minerals a national task for South Korea, which is the world’s fifth largest consumer of raw materials with developed manufacturing industries such as semiconductors, automobiles and mobile phones.

Starting 2021, Chile became South Korea’s number one source of copper and molybdenum, accounting for 31.6% and 45%, respectively. This also applies to lithium carbonate, accounting for 81.7% of total imports. I believe this demand will continue.

Chile is South Korea's first FTA partner. At last year's summit-level meeting, the two countries agreed to upgrade the relationship to a strategic partnership. Komir will make efforts to further reinforce cooperation in the mining sector between the two countries.