Korea Resources Corporation is speeding up to sell its stake in a nickel mine in Madagascar to potential investors to tackle a years-long liquidity problem.

The state-run resources explorer is in the middle of contacting deal managers and advisors with an aim to select a preferred negotiator for the asset by the end of September, according to sources on Thursday.

The company’s asset to be put on sale is its 33 percent stake in the Ambatovy nickel and cobalt mine venture, which is jointly owned by Posco International (5.87 percent) and STX (1 percent). The other two Korean partners are expected to exit the business, but whether other shareholders – Japan’s Sumitomo (47.67 percent) and Canada’s Sherritt (12 percent) – will join the move remains unknown.

The Ambatovy joint venture involves the extraction and processing of nickel and cobalt from a mine in the middle-eastern part of Madagascar. Commercial production began in 2012 in the mine whose raw ores are estimated to reach 146.20 million tons.

The mine’s annual producible ores are 60,000 tons of nickel and 5,600 tons of cobalt. Ambatovy produced 33,736 tons of finished nickel and 2,897 tons of finished cobalt in 2019.

The Ambatovy project drew attention from around the world for its staggering fund injection of $8.9 billion in total.

But the delayed business exit has brought a growing financial burden to Korea Resources Corporation whose operating loss hit 505.1 billion won ($425 million) last year alone. Most of the loss came from the Ambatovy business.

Korea Resources Corporation is also attempting to sell stakes in other overseas mine projects to get out of a liquidity crunch, but little progress has been made.

By Kang Woo-seok and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]