SEOUL, May 15 (Korea Bizwire) — South Korea’s state resources developers are gearing up for potential inter-Korean projects amid growing hopes for economic cooperation with North Korea following a landmark summit, sources said Tuesday.
At the end of the historic summit in late April, the leaders of South and North Korea adopted a joint declaration that focuses on working toward a complete denuclearization of the Korean Peninsula and ending the Korean War.
It also calls for actively pursuing economic projects agreed upon in 2007, including an expansion of a joint industrial complex in the North Korean city of Kaesong and the launch of cross-border cargo railway service. The projects, which were contained in the so-called Oct. 4 declaration adopted after the 2007 summit, have been on ice amid chilly inter-Korean ties during the two previous conservative governments in the South.
According to the sources, the Ministry of Trade, Industry and Energy recently hosted a meeting of officials from Korea National Oil Corp., Korea Gas Corp. and Korea Resources Corp. (KORES) to review projects that can be pursued should inter-Korean economic cooperation resume.
“The participants discussed the projects contained in the Oct. 4 declaration and potential areas for inter-Korean cooperation down the road,” an official said. “In the past, cooperation between the two Koreas in such fields as petroleum, gas and minerals made some headway.”
South Korea has only conducted a joint project with North Korea in the minerals sector.
In July 2003, KORES signed a joint venture agreement with a North Korean firm to invest US$6.65 million in a graphite mine near the western inter-Korean border, which started commercial production four years later.
KORES had planned to produce 3,000 tons of graphite per year by 2023, but the project was put on hold after Seoul halted economic relations with the North due to Pyongyang torpedoing the South Korean warship Cheonan, which killed 46 South Korean sailors.
The official said there is a high possibility of KORES again seeking to establish an industrial complex in the resources-rich town of Tanchon on the east coast as part of North Korea. Tanchon is known for large reserves of magnesite, lead and zinc.
South Korea had planned to develop two to three mines in Tanchon with the aim of setting up a special zone, with both Koreas carrying out three joint surveys.
Concerning oil and gas, the participants only studied foreign cases due to the absence of joint inter-Korean projects, the official said.
Several foreign companies from China, Britain and the United States are known to have carried out oil and gas exploration in North Korea.
Watchers said South Korea’s state resources companies are faced with several hurdles to their potential cooperation with North Korea, including a lack of funds due to their excessive and unfruitful investment in overseas resources during the Lee Myung-bak administration (2008-13).
Another problem is that the May 24 measures have resulted in the dismantlement or downsizing of task forces on inter-Korean projects at the government and state resource developers, they added.
Meanwhile, the ministry’s inter-Korean economic cooperation team is keeping tabs on related issues and is expected to expand the team if conditions are ripe for full-fledged economic cooperation between the Koreas.