South Korea KEPCO seeks to secure overseas coal mines

South Korea KEPCO seeks to secure overseas coal mines

South Korea’s Korea Electric Power Corp. (KEPCO) is trying to secure overseas coal mines as early as this year as it seeks a steady coal supply for its generators, the company’s president said on Wednesday.

State-run KEPCO, which currently holds no stakes in coal mines, will also look at mergers with overseas electric power companies in its pursuit of energy supplies, he said.

“(South Korean) Power generators use about 45 million tonnes of coal each year for power generation, which are all imported from overseas,” KEPCO president Lee Won-gul told reporters.

KEPCO and its generators will form a consortium for the stake-hunt, he said.

KEPCO’s plans follow other efforts by regional power companies to secure supplies, which are becoming tighter as demand increases in Asia.

Earlier this month, India’s Tata Power Co. , which bought a 30 percent stake in a set of Indonesian mines from PT Bumi Resources for $1.3 billion.

Also earlier this month, South Korea’s largest refiner, SK Corp. , said it aims to buy a share in an Indonesian coal mine early next year, after securing a $25 million stake in an Australian mine last month.

The country’s coal demand is predicted to grow by 7 percent annually in the coming years, requiring another 15 million tonnes a year by 2010, according to industry experts.

South Korea has been experiencing delays in coal from major suppliers China and Australia on strong domestic demand in China and delays from Australian ports.

Lee also said that despite tariff hikes, overall earnings in 2007 are likely to be lower than that of 2006 as raw material prices are high.

But analysts polled by Reuters Estimates expected KEPCO to report 28.9 trillion won ($31.13 billion) in sales for 2007, up from 26.98 trillion in 2006.

Information from: Reuters via

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