South Korea plans to launch a 260 billion won ($279.1 million) fund in October to invest in a Madagascar nickel mine as its first move to raise seed money for the development of mines around the globe, the country's mining body said on Sunday.
UBS Hana Asset Management Company Ltd, 51-percent owned by Swiss investment bank UBS AG, will manage the fund while Goodmorning Shinhan Securities, Daishin Securities, Daewoo Securities and Mirae Asset Securities will sell the fund, the Korea Resources Corporation (KORES) said.
The move came as the global prices of steelmaking additive nickel remain under pressure from weak demand and concerns over recent financial market turmoil.
But KORES expressed confidence on the fund's profitability, saying development costs are low and nickel prices are still high compared with 2003. "Production costs of the nickel mine in Ambatovy, Madagascar, are just about 30 percent of ones of other nickel mines, so the project is very profitable," the agency, which supports development of local and global mineral resources, said in a statement. The mine is estimated to have 125 million tonnes of nickel ore and South Korea expects it to produce up to 60,000 tonnes of the metal a year from 2010.
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