Moon Administration Cuts Overseas Resource Development Budget by 68%... Approximately 950 Billion Won

Ministry of Trade, Industry and Energy '2021 Overseas Resource Development Report'

A view of the Narrabri thermal coal mine in Australia owned by the Korea Mine Reclamation Corporation.
[Photo by Asia Economy DB]

[Asia Economy Sejong=Reporter Lee Jun-hyung] The government support budget for overseas resource development has decreased by nearly 70% over the past five years. Concerns are rising that supply chain instability could worsen as major countries weaponize resources.

According to the "2021 Overseas Resource Development Report" submitted by the Ministry of Trade, Industry and Energy to Rep. Koo Ja-geun of the People Power Party on the 14th, the government support budget for overseas resource development, including equity investment and loans, totaled 436.9 billion KRW from 2017 during the Moon Jae-in administration to last year. Compared to the Park Geun-hye administration period (1.3864 trillion KRW), this represents a 68.5% (949.5 billion KRW) decrease. In particular, the equity investment budget for oil field development projects decreased by 65.4% (200.8 billion KRW), from 307 billion KRW to 106.2 billion KRW.

As the government support budget shrank, private investment also contracted. The number of newly initiated resource development projects in the oil and gas sector during the previous administration was 10, nearly half compared to 19 projects under the Park Geun-hye administration. In the mineral resources sector, 55 new projects were launched during the Park Geun-hye administration, but only 14 projects were initiated during the last administration.

Trends in government support budgets for overseas resource development.
[Photo by Gu Ja-geun, Office of the People Power Party lawmaker]

This contrasts with the global trend of steadily increasing investment in resource development. According to S&P Global, worldwide investment in mineral resource exploration rose about 40%, from 8.045 billion USD in 2017 to 11.241 billion USD last year. With the growing demand for electric vehicles, investment in lithium exploration, a key material for secondary batteries, reached 248.8 million USD last year, a 25% (49.7 million USD) increase compared to the previous year.

Rep. Koo said, "The previous administration reduced long-term and proactive investments to secure overseas resources, leading to a crisis of price surges caused by an energy supply shortage," adding, "Overseas resource development projects must attract private investment through long-term and challenging government budget investments."

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