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S. Korea Seeks More Independence in Resource Supply
Source: koreaherald.com
Source Date: Monday, October 04, 2010
Focus: Knowledge Management in Government, Institution and HR Management
Country: Korea (Republic of)
Created: Oct 10, 2010

The government on Monday pledged to enhance its self-reliance rate of six core resources -- coal, uranium, steel, copper, zinc and nickel -- from 27 percent to 32 percent over the next two years.

The Ministry of Knowledge Economy said it will also increase the self-development rate of the country’s oil and gas supply to 32 percent by 2012 in a report submitted to the National Assembly for its parliamentary inspection.

The rate this year was greatly elevated to greater than 10 percent after the Korea National Oil Corporation successfully pulled off the $2.6 billion deal to acquire British oil and gas explorer Dana Petroleum Plc last month. KNOC became the first-ever Korean company to obtain a foreign corporation through a hostile takeover.

The ministry said it will achieve its goal to seek more independence in the country’s energy and resource supply mostly by having state-run energy firms invest more in foreign oil companies and mines.

Yet the same report showed that the state-run energy and resources firms’ debt went up largely during the past five years due to their foreign investment projects.

Korea Power Corporation’s debt increased by 48.8 percent from 19.4 trillion won ($17.2 billion) to 28.8 trillion won, while that for the Korea Gas Corporation this year was registered at 17.7 trillion won and KNOC’s was 3.4 trillion won.

Alongside oil and coal, the government will make efforts to more aggressively secure rare earth elements and lithium, whose demand has soared recently due to its increasing use, particularly in green industries.

The ministry said it plans to expand its financial support and tax benefits for private firms to induce their active investments in resources overseas, while reinforcing research and development regarding the field at institutes and universities.

Meanwhile, the ministry said it will invest 1.3 trillion won in the country’s industrial complexes in Incheon, Ansan, Gumi and Iksan to improve their infrastructures and promote their vitalization.

The government’s plan to transform the existing industrial clusters which mostly consist of small- to mid-sized firms to high-tech ones has been lagging due to the sluggish property market and consequent lack of firms’ participations.
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