Gov't to inject 300 bln won to build up local rare metal industry
PKX | Quote | Chart | News | PowerRating -- South Korea unveiled Friday an investment plan to develop its rare metals industry, hoping to secure local materials sources for its high-tech sector.
The 300 billion won (US$257.7 million) plan was outlined at a meeting of officials from government and businesses, including the world's No. 4 steelmaker, POSCO. The money will be spent on furthering development of 40 key smelting, refining and reprocessing technologies for 10 types of rare metals until 2018, the Ministry of Knowledge Economy said.
With the project, the ministry hopes South Korea will be able to produce 80 percent of the rare metal products it consumes, up from just 12 percent at present.
"In the 21st century the global economy will be led by the rare metal industry," Knowledge Economy Minister Choi Kyung-hwan said, "requiring a comprehensive approach to its development."
The project also aims to boost the number of local rare metal manufacturing companies from 25 to 100, build dedicated regional industrial clusters for such businesses, and utilize a specialized mergers and acquisition fund to buy up foreign firms.
The ministry said the need to grow the rare metal industry is becoming more urgent, as these materials are used to make high-tech products like light emitting diodes, display panels and battery cells needed to drive electric cars.
"We will give first support to the development of technologies needed to process the rare metals that are in high demand," said Lee Seung-woo, head of the ministry's steel-chemical division. These metals are gallium, titanium, lithium, white gold, cobalt, magnesium, indium, tungsten, nickel and rare earth elements.
Lee added that 15-20 additional rare metals will be selected for development down the road as part of the country's long-term effort to enhance overall competitiveness in this sector.
The government will ask the private sector to more than match its spending with an additional 820 billion won by 2013. The ministry said it also aims to secure a strategic stockpile of 18 million tons of titanium, tungsten, magnesium, molybdenum and rare earth elements by 2015.
The plan does not address how to secure a steady supply of the rare metals, which are mostly produced in China, Canada, Australia, the United States and former Soviet states.
Lee said POSCO plans to spend 34.6 billion won by 2011 to build a magnesium processing plant in Gangwon Province with an annual capacity of 10,000 tons. Depending on demand, the steelmaker plans to invest a total of 200 billion won to increase its capability to 100,000 tons.
POSCO also announced a plan to invest 2.8 trillion won by 2018 to diversify its operations into the materials manufacturing industries.
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