S. Korea clears way for overseas development of rare metals

SEOUL, July 5 (Yonhap) -- South Korean companies and developers are now able to directly develop or invest in overseas mines for indium and lithium, two rare metals that are used to produce display panels and batteries for electric cars, the government said Tuesday. The revised law on the overseas resources development project adds indium to the list of 49 foreign rare metals, allowing local developers to send large sums of money overseas and get soft government loans when directly developing or investing in new overseas mines, the Ministry of Knowledge Economy said. The metal is mainly used to produce electrodes for liquefied crystal displays. South Korea annually produces about 50,000 tons of the metal, the world's third-largest amount, but the amount is not enough to meet the ever-growing demand of the world's two largest flat panel makers here -- Samsung Electronics Co. and LG Display Co. The increasing price of the rare metal is also forcing South Korea to secure steady sources, according to the ministry. South Korea's imports of indium increased from 28 tons in 2009 to 108 tons last year, but the amount of money spent to import the metal jumped over five times from a little over US$10 million to $53.8 million as the average price of indium increased 373 percent from $183 per kilogram in 2003 to $684 per kg in May 2011. The revised law also named lithium, a key ingredient of lithium-ion batteries for electric cars, as one of the strategic resources for overseas development, a move that allows developers to create new development funds that are subject to various tax breaks and other incentives, including overseas investment insurance. Lithium is an extremely rare metal whose entire global production in 2009 came to only 18,000 tons, half of which came from Chile. South Korea is one of the largest consumers of lithium, importing 7,988 tons of the metal, worth over $40 million, in 2010, the ministry said.