Hunt for overseas resources pays off

Efforts by general trading companies in Korea to tap overseas natural resources are paying off with their earnings spiking last year amid the global economic slump, industry sources said yesterday.

Local trading firms have been rushing to develop overseas natural resources to diversify their business portfolios and seek new growth engines.

SK Networks, the nation’s biggest trading company, is estimated to have racked up some 300 billion won ($259 million) in operating income last year on sales of 27.1 trillion won, up 25 percent and 15.8 percent, respectively, from a year earlier.

In 2010, SK Networks invested $700 million in MMX Mineracao & Metalicos SA, a Brazilian iron ore miner, which allows SK Networks to secure more than 9 million tons of iron ore a year from the investment. The figure is equivalent to 16 percent of Korea’s annual consumption.

In the same year, SK Networks clinched a deal with Canada’s Consolidated Thompson Iron Mines to buy up to 10 million tons over the next 10 years.

Daewoo International, the nation’s second-largest trading firm, is estimated to have posted sales of 19 trillion won last year, compared with 15.6 trillion won a year earlier. Its operating income for 2011 is also expected to have topped the previous year’s 172 billion won, according to the sources.

Daewoo International is developing gas fields off the west coast of Myanmar. A total of 4.5 trillion cubic meters of gas can be collected from the three gas blocks off the coast of the Southeast Asian country, the company said earlier.

The nation’s No. 3 trading firm Samsung C&T is also benefiting from its investment in resource development. The company is projected to have chalked up 10.2 trillion won in sales in the first three quarters of last year, surpassing the previous year’s total sales of 6.4 trillion won.

Samsung C&T has been producing 16,000 barrels a day at an offshore oil field in the Gulf of Mexico from a partnership with the state-run Korea National Oil Corporation.

LG International, the country’s leading coal trader, is expected to have posted sales of 14.35 trillion won and 217 billion won in operating income last year, similar to the previous year’s figures.

Yonhap