South Korea July coal imports up 3.7%

September 17, 2009: South Korea's thermal coal imports in July rose 3.7 percent to 8.97 million tons (mt) from 8.65 mt a year earlier, the country's customs data showed on August 16.

However, the country imported a total of 50.34 mt of coal in the first seven months of this year, down 5 percent from the same period last year, the data showed.

While the country's coal imports for July rose from a year earlier, imports of liquefied natural gas (LNG) fell for the seventh consecutive month from a year ago due to high stocks and low demand from local utilities, the data revealed. LNG accounts for about 15 percent of power generation in South Korea.

South Korea paid an average of $89.38 per ton for coal in July, up from $82.64 a ton a month earlier but much lower than $121.54 a year earlier.

The highest amount of coal was imported by the country from Australia. The imports stood at 3.83 mt against 3.44 mt a year ago. Indonesia ranked second, shipping 2.91 mt of coal to South Korea against 2.61 mt a year ago.

The value of coal imports from Australia stood at about $370 million, while that from Indonesia stood at about $196 million.

South Korea is a typical example of a country which has experienced increasing energy demand in keeping with the economic development in the process of industrialisation. During the period 1980 to 1995, South Korea's energy demand increased 3.5 times (IEA, 1997a; IEA 1989), while the GDP increased 7.1 times (World Bank, 1997).

However, as the country, which is a major consumer of coal, is very poorly endowed with indigenous energy resources, its energy demand is largely met by imports. Almost all the coal produced in South Korea is anthracite, whose total reserves is estimated at 276 mt.

The production of anthracite coal in the country, according to a very old report, touched 24.3 mt in 1988, but fell to about 5 mt by 1996 due to the closure of small and uneconomical mines.

South Korea is one of the leading coal importers in the world and had imported about 90 mt of coal in in 2008-09 compared with 43.9 mt in 1995.

Meanwhile, two South Korean companies have agreed to buy a nominal 7.5 percent stake in a soft coal mine in Australia for about A$125 million ($105.2 million) to secure 1.5 million tons of bituminous coal a year, a South Korean newspaper reported.

Korea Resources Corporation (KORES) and Daewoo International signed a preliminary deal to buy the stake from Australian coal miner Whitehaven, Maeil Business Newspaper quoted unnamed industry officials as saying. KORES and Daewoo are expected to sign a final deal around the end of August 2009, the paper added.

Source: Coal Insights