Government Prevents 'Gwangmul Gong' Bankruptcy... Begins Preparations for Integrated Corporation Launching in September

Follow-up Measures After the Passage of the 'Gwanghae Mining Corporation Act' in the National Assembly Plenary Session... Appointment of the President of the Mineral Corporation Confirmed

[Sejong=Asia Economy Reporter Kwon Haeyoung] As the bill to merge Korea Resources Corporation and Korea Mine Reclamation Corporation passed the National Assembly plenary session, the government has begun practical work to establish the integrated corporation, 'Korea Mine Reclamation and Mining Corporation,' which will launch this September.

According to the government on the 28th, the Ministry of Trade, Industry and Energy will form a Corporation Establishment Committee to carry out the integration work of the two corporations. The committee will be composed of up to 15 members, including the ministry’s vice minister as chairman, government officials, private experts, and heads of the two organizations’ headquarters, to discuss the organization and functions of the corporation.

Once the Mine Reclamation and Mining Corporation is established with a capital of 3 trillion won, it will mainly be responsible for mine reclamation projects and environmental improvement projects in mining areas. The overseas resource development business functions previously handled by Korea Resources Corporation will be abolished. The ministry plans to set up an Overseas Asset Sales Management Committee to sell all overseas assets held by Korea Resources Corporation. With the corporation’s functions significantly reduced, restructuring is also expected to be inevitable.

Although the integrated corporation is scheduled to launch in September, the government plans to appoint the president of Korea Resources Corporation soon. It is reported that the Public Institution Management Committee recommended Hwang Kyu-yeon, former chairman of Korea Industrial Complex Corporation and a senior official at the Ministry of Trade, Industry and Energy, as the final candidate last week. This is interpreted as a judgment that a leader is needed to lead the integration discussions amid the time gap until physical integration.

Korea Resources Corporation is currently in a state of capital erosion due to massive investment losses from overseas resource development projects pursued during the Lee Myung-bak administration. As of the first half of 2020, its debt stood at 6.65 trillion won, and the capital erosion amounted to about 3.36 trillion won. A bond maturity of 500 million dollars is due in April, but the corporation has completely lost its ability to repay on its own, which previously sparked bankruptcy rumors.

The government has been promoting the integration of the two corporations since March 2018 but repeatedly failed to pass the National Assembly. Finally, on the 26th, after three years, the 'Korea Mine Reclamation and Mining Corporation Act,' which centers on merging the two institutions, passed the National Assembly plenary session, establishing the legal basis for the integration.

This content was produced with the assistance of AI translation services.