[USFK Forums] S. Korea plans first imports of iron ore from North [Reuters]

[C. Y. Lee]

Uploaded by C. Y. Lee on Thursday, March 30, 2006

S.Korea plans first imports of iron ore from North

Wednesday March 29, 5:03 PM

SEOUL, March 29 (Reuters) - South Korea plans to receive its first shipment of iron ore from North Korea in May, an official said on Wednesday, marking a significant step in a newly formed relationship between the two adversaries.

The iron shipment will come at about the same time as a shipment of graphite from North Korea, the official from the South's state run Korea Resources Corporation said.

The minerals will be the first sent across the heavily fortified border since Seoul and Pyongyang reached a deal on exploitation of resources in July 2005.

The iron ore will come from a mine northwest of Pyongyang that has been developed by Korea Resources Corporation and a Chinese state-run company, the official said.

North Korea has vast mineral deposits but lacks the technology and money to exploit them. It has been looking for international partners for mining ventures, while South Korea, the world's 11th largest economy, is a major importer of commodities.

The iron ore mine is estimated to contain 100 million tonnes of ore, valued at 6 trillion won ($6.14 billion).

"We have sent various equipment to the North to develop the mine. Production will start from April," the official at Korea Resources Corporation told Reuters by telephone.

The jointly operated mine would produce 144,000 tonnes of iron ore for the next three years for South Korea and China. South Korea holds a 60 percent stake in the mine, with China holding the remainder.

South Korea is a major steel producer and local company POSCO is the world's fifth-largest steel maker.

Korea Resources Corporation is also considering developing a second North Korean mine, which is estimated to have 2 billion tonnes of iron ore. South Korea imported about 44 million tonnes of the mineral last year.

The two Koreas are technically still at war because the 1950-1953 Korean War ended in a truce and not with a peace treaty. But ties have warmed significantly in the past year.

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