Up to 50% Financing for Overseas Resource Exploration Projects and Increase of Failure Reduction Rate to 80%

Ministry of Trade, Industry and Energy's Public-Private Partnership Strategy for Overseas Resource Development

The government has decided to expand financial support by increasing the loan support rate and failure reduction rate to stabilize the supply chain of critical resources through private-led overseas resource development.

On the 21st, the Ministry of Trade, Industry and Energy held a policy meeting chaired by Minister Ahn Deok-geun at the Lotte Hotel in Seoul, with major companies involved in overseas resource development participating, and announced the "Public-Private Cooperation Overseas Resource Development Promotion Strategy."

Amid the recent spread of geopolitical risks and the global trend of weaponizing resources, uncertainties in the energy supply chain have intensified. The government is promoting the recovery of the overseas resource development industrial ecosystem as a national agenda to stabilize the supply chain of critical resources. Accordingly, the Ministry of Trade, Industry and Energy established this public-private cooperation overseas resource development promotion strategy by gathering opinions from industry, experts, and related ministries. The strategy was announced through the meeting, and industry opinions and difficulties were heard.

Through this promotion strategy, the government plans to pursue various tasks including ▲expansion of financial and tax support ▲promotion of mid- to long-term technology development and workforce training projects ▲activation of domestic resource development ▲strengthening the support role of public enterprises for private companies ▲and enhancing resource diplomacy with resource-holding countries.

First, the loan support rate for projects with high contributions to resource security, such as exploration, operating rights, and domestic introduction, will be increased from 30% to 50%, and the failure reduction rate will also be raised from 70% to over 80%. Additionally, the scale of public enterprise investment in oil field development will be increased from 30.1 billion KRW in 2023 to 48.1 billion KRW in 2024. The government will continue to support public enterprise investment in oil field development to serve as a catalyst for investment in domestic oil and gas field development and overseas exploration projects, where private participation is low.

Along with this, overseas resource development projects will be given preferential treatment in loans and insurance support from policy financial institutions, and contributions to the Trade Fund (2026?2030) will be promoted to expand investment insurance. A new joint exploration support project for private and public enterprises will also be established to verify the potential of mines secured by the private sector overseas.

Tax support will also be strengthened. At the investment initiation stage, the tax credit for investments and equity acquisitions for mining rights by domestic or overseas subsidiaries, which expired in 2013, will be reintroduced. At the investment recovery stage, since last year, 95% of dividend income received by domestic corporations from overseas resource development subsidiaries (with a stake of 5% or more) has been exempted from tax.

In addition, the government will launch a workforce training project in major resource fields such as oil, gas, and minerals starting next year to support the entire cycle of resource development talent cultivation. Furthermore, a follow-up project to the "Resource Development Technology Development" program, which expired in 2020, will be established to overcome small-scale and fragmented support and promote mid- to long-term, systematic research and development (R&D).

Minister Ahn said, "Securing a stable energy resource supply chain is a prerequisite for the stability of our national economy and the development of advanced industries," adding, "Public-private cooperation is more important than anything else to revitalize the overseas resource development industrial ecosystem."

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