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Major Minerals
Bituminous Coal
A. Demand and Supply
The consumption amount of bituminous coal increased by 11.4% in 2000, by 5.5% in 2001 and by 7.1% in 2002. These year-on-year increasing rates are caused by the significant increasing rate of electricity-use consumption due to the operation of new electric power stations using bituminous coal since 1993. On the other hand, the steel making industry consumption is steady around the amounts of 19.3 mil. ton to 20.1 mil. ton for the period.
 
< Bituminous Coal Consumption by End-Use Sector >
(Unit : Million ton)
  2000 2001 2002
Amount Growth Portion Amount Growth Portion Amount Growth Portion
　Iron/Steel 19.4 5.3% 32.2% 19.3 ≠ 0.5% 30.3% 20.1 4.1% 29.5%
　Electricity 33.3 17.7% 55.2% 36.6 9.9% 57.5% 40.1 9.7% 58.8%
　Cement/Other 7.6 2.7% 12.6% 7.8 2.6% 12.2% 8.0 2.6% 11.7%
　Total 60.3 11.4% 100.0% 63.7 5.5% 100.0% 68.2 7.1% 100.0%
 
< Bituminous Coal Imports By Country >
(Unit:1,000 ton, million US$)
  2000 2001 2002
Amount Value % Amount Value % Amount Value
　Australia 24,161 902 41.8 26,074 1,008 44.7 2,851 99.5
　China 24,767 790 36.6 25,292 796 35.3 - -
　Canada 5,451 223 10.3 4,543 204 9.1 756 26.4
　Indonesia 4,625 131 6.1 5,794 152 6.7 11,510 401.7
　Russia 1,887 66 3.1 2,894 92 4.1 160 5.6
　U.S.A 642 33 1.6 - - - 336 11.7
　South Africa 264 10 0.5 - - - - -
　Others 60 2 0.1 43 2 0.1 - -
　Total 61,857 2,157 100 64,640 2,254 100 15,613 544.9

Korea imports most of its bituminous coal from Australia and China occupy 80% of the whole amount. Thus, Korea needs a better diversification of importing sources. The amount of imports from the overseas projects was 15.6 million tons (24.2% of the whole import amount) in 2002.
 
B. Prospect
- Metallurgical Coal
The cokes converted from the coal of raw materials are put into the shaft furnaces with iron ore. The shaft furnaces are used at POSCO's 2 plants (Pohang Steel and Kwangyang Steel). There are no plans to expand the facilities and the steel companies that are going to be made by Hyundai and Hanbo Group will not use the shaft furnace. The amount of bituminous coal consumption was 0.75 ton for making one ton of steel in 2001, and the amount of cokes consumption is increasingly affected by the increasing use of PCI. The amount used is expected to remain constant or fall with the general techniques of the fusing resolution. Also, the demand will be kept around 17-20 million tons per year.
 
- Steam Coal
According to the long-term electric power source plan by KEPCO (Korea Electricity Power Corp.), power stations using bituminous coal with capacity of 16.8 GW, 19.2 GW will be made by 2005 and 2010 respectively. In 2002 KEPCO consumed 40,143 thousand tons of bituminous coal with combined capacity of 14.7 GW. The amount of bituminous coal demand is estimated to be 43.7 million tons in 2005 and 50 million tons in 2010, which will encourage the desperate efforts of overseas resource development.
 
- The Other Industrial End Use
The demand in 11 of the cement companies occupies about 70%, which is estimated to be 5,475 thousand tons in 2001, and it is assumed that there is no significant extension plan in the cement industry. The demand in the Year 2010 is expected to be 9.7 million tons; including 7.1 million tons in cement industry and 2.6 million tons in the other industries.

Therefore, the demand in 2010 is expected to be total 79.2 million tons; 19.5 million tons for steel making use, 50.0 million tons for electric generation, and 9.7 million tons for general use.
 
<Prospect of Bituminous Coal Demand by End-User-Sector >
(Unit : Million tons)
  2000 2005 201 Growth (%)
　Iron/Steel 19.4 19.5 19.5 0.5
　Electricity 33.3 43.7 50.0 4.6
　Cement/Other 7.6 9.7 9.7 2.7
　Total 60.3 72.9 79.2 3.1
 
Uranium
A. Domestic Reserves
Although much of the low grade uranium ore (Reserves 115.6 million tons, Avg. Grade U 3 O 8 0.039%) has been identified in Chungcheong Province, they are not economical for commercial production. Korea has been importing all of the uranium concentrates needed.

The 18 atomic energy power stations are being in operation with total capacity 15,716 MW of taking 30.5% of all the production capacity (51,467 MW) of which light water reactors take 12,937 MW and heavy water reactors the other 2,779 MW. The capacity of 2 atomic energy plants under construction is 2,000 MW of light water reactors.
 
B. The Capacity of Nuclear Power Plants and Prospects
(Unit : 1,000Kw)
  Plant Capacity Type Year
Operation Gyeongnam Kori #1 587 Light water reactor 1978.04
  #2 650 Light water reactor 1983.07
  #3 950 Light water reactor 1985.09
  #4 950 Light water reactor 1986.04
Gyeongbuk Wolseong #1 679 Heavy water reactor 1983.04
  #2 700 Heavy water reactor 1997.07
  #3 700 Heavy water reactor 1998.07
  #4 700 Heavy water reactor 1999.10
Jeonnam Youngkwang #1 950 Light water reactor 1986.08
  #2 950 Light water reactor 1987.06
  #3 1,000 Light water reactor 1995.03
  #4 1,000 Light water reactor 1996.01
  #5 1,000 Light water reactor 2002.05
  #6 1,000 Light water reactor 2002.12
Gyeongbuk Uljin #1 950 Light water reactor 1988.09
  #2 950 Light water reactor 1989.09
  #3 1,000 Light water reactor 1998.08
  #4 1,000 Light water reactor 1999.12
Total 15,716    
Under
Construction 		Gyeongbuk Uljin #5 1,000 Light water reactor 2004.09
  Uljin #6 1,000 Light water reactor 2004.06
Total 2,000    
 
The 18 atomic energy power stations are being in operation with total capacity 15,716 MW of taking 30.5% of all the production capacity (51,467 MW) of which light water reactors take 12,937 MW and heavy water reactors the other 2,779 MW. The capacity of 2 atomic energy plants under construction is 2,000 MW of light water reactors.
 
C. The Supply and Demand of Nuclear Fuel and the Prospects
Due to the lack of conversion and enrichment facilities, nuclear fuel is supplied in the semi-processed form of UO 2 on long-term contracts with foreign countries.
The supply states by the fuel cycle are as follows;
- Concentrates : The total amount of concentrates has being imported. Annually about 3,000 tons of concentrates is imported from USA, England, Canada, Markets.
- Conversion : The concentrates for the heavy water reactors have being converted to UO 2 powder by Cameco in Canada. Those for the light have being converted and enriched to UF 6 in USA, Canada, England, France and Russia which have conversion and enrichment facilities.
- Enrichment : The whole amount of enrichments has being imported from USA, England, France and Russia through the tolling agreement and the direct purchase.
- Fabrication : From 1999, all of demands has being supplied domestically (400 ton U/year for light water reactors, 400 ton U/year for heavy)
 
< Long-term Nuclear Fuel Demand Prospects >
Year 02~03 04 05~07 08 09 10
Number of Plant Unit 18 19 20 21 23 25
Plant Capacity 000 Kw 15,716 16,716 17,716 18,716 20,716 23,116
Fuel Demand Ton U 3,255 3,475 3,695 3,915 4,355 4,883
 
Iron Ore
The steel industry of South Korea played a leading role in the country's rapid economic growth. The capacity of steel making in Korea was 48,883 thousand tons in 2002, up by about 326 times from 150 thousand tons in 1962. This is especially from the installation of the first blast furnace in POSCO, which has brought to make a rapid growth of the steel making capacity of more than 12% annually. However, the investment in the plant expansion of the steel industry has now suspended by the continuing restructuring of Korea steelmaking companies since the IMF economic crisis and the world steel oversupply in the second half of 2002.

The total steelmaking capacity is 48,883 thousand tons, total domestic production amounted to 45,390 thousand tons in 2002, and this estimated to persist for the time being.
 
< Steel Industry Statistics >
(Unit : million tons)
Year 2000 2001 2002
Steelmaking capacity      
B.O.F 26,180 26,180 27,440
EAF 23,475 23,708 21.443
Total 49,655 49.888 48,883
Consumption 39,801 39,571 na
Production 43,107 43,852 45,390
Import 1,158 1,141 na
Export 8,639 8,756 na
 
POSCO and Kwangyang Steel Co. are equipped with the blast furnace which requires iron ores, and the other steel companies are made by the electric furnaces. For the increasing demand of iron, the Mini Mills are substituted, since then blast furnace will not meet the demand every year. Demand is expected to rise to 43,062 thousand tons 42,969 thousand tons for making steel, and 93 thousand tons for cement and other industrial usage.
 
< Demand of Iron Ore >
End-use Company Amount (1,000t) Remarks
    2001 2002  
　Iron/Steel POSCO, Kwangyang 45,809 42,969 Capacity 26 mill. ton
　Cement Cement Companies 29 93  
　Total   45,838 43,062  
 
The serves are estimated to be 32.7 million tons of average grad being Fe 40.0%. The output of 157 thousand tons from Shinyemi mine was carried to cement companies including Asia Co. and Dongyang Co. and also supplied to POSCO in 2002. Therefore, most of the demanded was supplied by imports from Australia, Brazil, India, Chile, of which the iron ore from Australia and Brazil occupied 86.5% of the whole import amounts.
 
< Imports by Country >
  2000 2002
Amount Value % Amount Value %
　Australia 28,241 596 61.6 26,152 538 60.4
　Brazil 11,650 321 25.4 11,285 305 26.1
　India 2,967 72 6.5 2,878 63 6.6
　Chile 912 34 2.0 1,151 40 2.6
　South Africa 586 18 1.2 1,032 28 2.4
　Peru 593 20 1.3 448 15 1.0
　Canada 767 22 1.7 298 7 0.7
　China 55 2 0.1 66 1 0.2
　Other 104 5 0.2 1 1 -
　Total 45,875 1,090 100 43,311 998 100
 
The serves are estimated to be 32.7 million tons of average grad being Fe 40.0%. The output of 157 thousand tons from Shinyemi mine was carried to cement companies including Asia Co. and Dongyang Co. and also supplied to POSCO in 2002. Therefore, most of the demanded was supplied by imports from Australia, Brazil, India, Chile, of which the iron ore from Australia and Brazil occupied 86.5% of the whole import amounts.
 
Non-ferrous Metals
Korea has two big smelters, of which copper smelter is operated by LG-NIKKO and zinc smelter Korea Zinc respectively. There are no base metal mines in Korea. Therefore, the smelters are fully supplied by imported conc. ores. The other base metals are imported as ingot and various types of metal products because Korea has no smelting and refinery 1,240 thousand tons in 2002, which was wholly imported from Indonesia, Chile, Peru, Guinea, Argentina and Australia in import scale order. The import from Papua New Guinea were dramatically decreased owing to the environment problem of Ok-Tedi mine, instead the import from Guinea was increased. The imported copper conc. ores are sent to LG-Nikko copper smelter, with a smelting capacity of 420,000 tpy and refinery capacity of 510,000 tpy. LG-Nikoo's refinery plants are located in Onsan and Janchang in southern part of Korea. Annual refinery capacity at Onsan Plant is 450,000 tons and the capacity of Janghang plant is 60,000 tons. The domestic production of cathode copper from the smelter was 495 thousand tons in 2002. This amount accounts for over 54% of the total domestic demand which was 914 thousand tons in 2002. Korea had self-supplied 10,000~20,000 tons of zinc conc. ore from Kumho mine, until the early 2000s. But Kumho mine, only one in Korea, was closed in 2001, so all Zinc conc. ore must be imported from overseas.
 
< Supply & Demand of Cu, Pb and Zn Conc. Ore >
(Unit : M/T) 1998 1999 2000 2001 2002
Cu
(25~29%) 		Supply Previous year' s
stock 		31,886 24,222 25,267 22,420 27,510
Production 41 - - - -
Import 973,450 1,166,630 1,177,284 1,173,674 1,261,540
Total 1,005,377 1,190,852 1,202,551 1,196,094 1,289,050
Demand Domestic
Consumption		 979,557 1,165,585 1,180,131 1,168,584 1,240,319
Export 1,025 - - - -
Stock 24,222 25,267 22,420 27,510 48,731
Pb
(50%) 		Supply Previous year' s
stock 		2,614 2,110 21,174 20,447 39,213
Production 7,117 3,644 5,447 1,975 56
Import 164,829 178,010 251,644 242,355 229,367
Total 175,561 184,180 278,265 264,777 268,636
Demand Domestic
Consumption		 172,781 163,006 257,818 225,564 184,994
Export 254 - - - 54,585
Stock 2,526 21,174 20,447 39,213 29,057
Zn
(50%) 		Supply Previous year' s
stock 		88,229 77,557 108,548 95,522 89,485
Production 20,977 19,664 22,947 10,259 197
Import 800,136 881,885 959,645 1,073,850 1,167,827
Total 909,343 979,107 1,901,140 1,179,631 1,257,509
Demand Domestic
Consumption		 831,786 870,056 995,618 1,090,145 1,143,552
Export - 503 - - -
Stock 77,557 108,548 95,522 89,485 113,956
 
Korea Zinc's Onsan smelter, with the capacity of Zn 400,000 tpy and Pb 200,000 tpy and Young Poong's Sukpo smelter, with the capacity of Zn 110,000 tpy, consumed 1,143,552 tons of Zn conc. ore in 2002 which was imported mostly from overseas, including Peru, Australia, USA, Canada and Chile, etc. Korea Zinc also consumed 184,994 tons of lead conc. ore in 2002 which was imported from Australia, Peru, Swiss and USA, etc. The zinc metal is self-supplied 70% of total consumption in Korea which amounted to 446,748 tons in 2002, and the balance 30% is imported as ingot and semis from overseas.

The lead metal is also self-supplied 55% of total consumption in Korea which amounted to 321,876 tons in 2002, and the balance 45% is imported as ingot and semis from overseas. Korea is the 5 th Zn metal consuming country, following the China, USA, Japan, and Germany. Also, Korea is the 5 th largest Zn metal producer following China, USA, Canada and Japan, based on the Korea's smelting capacity of 510,000 t (Onsan 400,000 t and Sukpo 110,000 t) in 2002

In regard of Pb, Korea is the 4 th largest consumer following the US, China and Germany. Copper mining is expected to grow yearly at about 6% in the future. With neither refining nor smelting facilities expected to be built in 2003 and thereafter, the import of cathode copper is expected to increase. Even refining facilities of zinc are not expected to be extended due to environmental problems such as air pollution. Annual demand for zinc ingot is therefore expected to increase by about 6%.
 
< Supply & Demand of Cu, Pb and Zn Metals >
(Unit : M/T) 2000 2001 2002(F)
Cathode
Copper 		Supply Domestic Sales 470,945 494,561 510,000
Import 352,684 419,475 425,000
Demand Domestic consumption 821,114 899,528 910,000
Export 828,778 914,036 935,000
Total 1,649,892 1,813,564 1,845,000
Lead Ingot Supply Domestic Sales 211,010 228,722 226,000
Import 138,870 143,031 142,000
Demand Domestic consumption 314,668 321,876 329,000
Export 35,212 49,877 39,000
Total 349,880 371,753 368,000
Zinc Ingot Supply Domestic Sales 503,315 600,027 644,000
Import 108,820 140,163 130,000
Demand Domestic consumption 381,297 446,748 428,000
Export 230,838 293,442 346,000
Total 612,135 740,190 774,000
 
Rare Earth
A. Domestic Reserve
Rare earth in Korea is Primarily monazite found in heavy sand that is distributed along the banks of steams and seashores. Rare earth was also discovered in rock form in the Hongcheon iron mine of the Gangwon province and monazite were contained in low-grade iron ore. The reserves of monazite found in heavy sand amount to 7,600 tons.
 
B. The supply and Demand
Rare earth is not produced in Korea. Because the refining technology for rare earth is antiquated, domestic demand is met by imported rare earth in the form of raw materials for final products. The demand for rare earth has been steadily increasing except that it temporarily declined due to the Asian Financial Crisis. With the growth of high-tech industries such as the electronic industry, however, demand for rare earth stared in creasing since 1999. Rare earth is imported in the form of compounds of separated elements. Among rare earth, Cesium, which is used mainly in abrasives, catalysts, and glass industries, is imported in the largest quantity. With local fluorescent substances produced during the latter part of the 1990s in Korea, 500 tons of rare earth in the form of the combination of Yttrium (Y203) and Europium (Eu203) are imported. The total amount of rare earth imported in 2001 was 4,173.5 tons valued at 32.6 million dollars, and the amount of rare earth extracted domestically was 198,9 tons valued at 1.3 million dollars.
 
< Import and Export of Rare Earth (by raw material) >
(unit : ton, mil U$)
  Import Export
1999 2000 2001 2001
Amount Value Amount Value Amount Value Amount Value
　Chemicals 3,448 23.7 3,926 30.9 4,163 32.1 198.9 1.3
　Metal 11.9 0.3 14.4 0.3 10.5 0.5 - -
　Total 3,459.9 24.0 3,940.4 31.2 4,173.5 32.6 198.9 1.3
 
C. Application Status and Outlook of Rare Earth
Demand for rare earth in its application has been on the rise every year. While products made of rare earth are crucial in high-tech industries, local production of these products are limited to the production of fluorescent substance-processed abrasives. This is due to the confinement of the application technology and the facilities that are locally available. Under such circumstances, it is necessary to secure the application technology with respect to permanent magnets, hydride reservoir alloy, and high-grade abrasives. LG-Nikko predicts that the local market for rare earth will be in the range of 350 million dollars in 2005.

Recognizing the importance of rare earth, the Korean government has been pursuing overseas resources development since the early 1990s. The country has not been successful as yet. Furthermore, the government acknowledged rare earth as one of the six most important strategic minerals in February 2001. It has since been trying to secure the stable supply of the mineral and has been promoting policies to support the related industries. Towards this end, Korean private companies are groping for foreign investment in abrasives and fluorescent substances according to the application technology and the markets that they have already secured.