Most overseas resource development projects end in failure

Most of South Korea's overseas development projects to exploit mineral resources have failed to meet initial expectations, mainly due to low profitability, a government report said Monday. According to the report submitted by the Ministry of Knowledge and Economy for the annual parliamentary audit, 100 of 270 overseas development projects in which South Korean firms invested money were judged commercially non-viable in 2010. Only 17 projects were considered successful, while the remaining 153 are in the process of being evaluated. The report also said that a total of 419 overseas mineral resource development projects, worth US$8.53 billion won, have been registered with the ministry since 1977, with South Korean firms having recovered $3.62 billion, or 42.4 percent of their investment. Of the 419 projects, 215 are ongoing, while 130 projects have ended and 74 were suspended, the report showed. Government-backed development projects also had a low success rate, with 46 failing and only 15 yielding resources that could be utilized, it noted. Nine out of 30 resource development agreements that were signed by the Lee Myung-bak government since April 2008 had been discontinued as of July because of low profitability or a breakdown in negotiations, the report said.