South Korean companies will begin exploring for rare earth metals in Burma following a visit earlier this month by senior Korean officials.
The two countries are due to commence a joint geological survey to look into potential deposits in Burma as Korea, like other nations, looks to diversify supply of the minerals. South Korea’s vice minister of knowledge economy, Park Young June, had travelled to Burma on 23 December to formalise the agreement.
Rare earth metals are becoming increasingly vital commodities in the manufacturing of a variety of hi-tech items, such as batteries for hybrid vehicles and in the making of flat-screen televisions and iPad computers.
China mined around 97 percent of the world’s supply of rare earth metals last year. It put fear into rivals, especially Japan, when in September it blocked exports to the country by an estimated 72 percent.
Beijing also announced recently that it would cut its global exports by 35 percent in the first few months of 2011 to prevent over-mining of the minerals. Many speculate however that the move was a result of conflicting ownership claims over islands in the East China Sea which are believed to have oil in their waters.
The US trade representative said Washington was “very concerned” about the move and was investigating whether the Chinese were breaking World Trade Organisation (WTO) regulations on exports, whilst EU officials were apparently pleading with their Chinese counterparts for greater exports to the regional bloc.
The Chinese move to control or block exports was seen by many as an aggressive flexing of it’s economic muscle, pushing manufacturing nations to seek new supplies as prices increased as a result of the controls.
Should Burma’s deposits turn out to be economically exploitable, it could prove a boon for the Burmese mining sector and another lucrative extractive industry for the generals. Success could indeed induce other nations to seek mining rights in Burma should China’s reluctance to export continue.
Bloomberg news said that the Korean delegation also requested rights to explore for oil and gas in onshore blocks.
Korean dealings with the Burmese regime will come under increased scrutiny as a result of the ongoing concerns regarding the ruling junta’s relationship with North Korea, highlighted in a recent exposé from Wikileaks.
South Korean investment from firms such as Daewoo, Hyundai and others could conversely be used to fund their northern counterparts, bypassing strict sanctions on the country to enable it to maintain its controversial nuclear weapons program. This came under renewed scrutiny recently after tensions on the Korean peninsula soared when the South carried out controversial military exercises with the US, and the North retaliated by shelling an island near to the disputed border.