South Korea as an Exploration Jurisdiction
After the Korean War ended in 1953, the focus of the country was on industrialisation, which gradually transformed South Korea into a modern and major economy. The mining sector was largely ignored because of prioritisation of the manufacturing, engineering, and construction industries. By the late 1990s, South Korea’s economic growth brought mineral and energy security to the forefront however Korean Government initiatives focused on offshore opportunities for minerals and energy rather than on domestic sources.
South Korea has a high level of industrialisation and a free market becoming the 12th largest economy in the world on a Nominal GDP basis. There is plentiful cheap electricity underpinned by nuclear energy and supplemented by imported coal and gas. The excellent transportation system includes high-speed rail and nationwide freeways and highways that provide easy access to the field. Sovereign risk is low, and the exploration and mining regulatory systems are transparent and straightforward. The state owns the minerals but grants rights to individuals or companies to conduct exploration and development. There are no mining royalties, and the corporate tax rate is 25%.
Mineral rights tenure is registered online and is designed for work to be completed on specific 'graticule' areas based on a minute of latitude and longitude, that can be consolidated into larger contiguous blocks; a use-it-or-lose-it principle is employed for the granting and maintenance of these mineral rights. The democratic government is pro-business and is supportive of exploration efforts by domestic and foreign operators, including the right of foreign companies to hold mineral licenses. Companies may apply for substantial drilling subsidies (which have been previously granted to Southern Gold to cover 70% of the direct drilling costs), and government funding is also available for restoration and environmental projects.
Good exploration opportunities in South Korea stem from the limited previous modern exploration in a region of prospective geology, particularly for epithermal gold-silver mineralisation. The Southern Gold exploration strategy is a boots-on-the-ground project generation approach through systematic field reconnaissance sampling and mapping within prospective volcano-sedimentary, pull-apart basins—a method that proved successful for Ivanhoe in the 1990s. South Korea has a prospective tectonic and volcanic setting for high-grade precious metal deposits and a record of historic production.
There has been limited district- and prospect-scale exploration, particularly drilling, and all historically mined deposits have clear surface expressions. The Ivanhoe epithermal discoveries, three of which became mines, were all outcropping in areas with no record of precious metal mineralisation or former prospecting activities; the Moisan and Eunsan deposits were found adjacent to main roads.
South Korea is an underexplored region for precious metals relative to surrounding countries. This is surprising, given the favourable tectonic and geologic setting and confirmed presence of epithermal ore deposits. South Korea is an attractive destination for foreign investment in the resources sector, given the potential for further epithermal precious metal discoveries. In addition, strong government support for the resources sector in a stable political environment is a major investment incentive. South Korea is ranked 5th for the ‘ease of doing business’ compared to Australia which is ranked 14th.