KORES buys stake in Indonesian mine

A South Korean consortium including Korea Resources Corp. has acquired a 90 percent stake in an Indonesian bituminous coal mine for $84.15 million, the state-run mineral developer said Tuesday.

KORES said it was involved in a joint venture with Korindo, a Korean-run developer in the Southeast Asian country, to buy the share for the 244 million-ton Kapuas mine from PKP Group, a local mineral exporter.

It is the country’s first-ever entry to the resource-rich Southeast Asian nation, KORES officials said.

KORES will invest $36.5 million in the mine over the next three years, with production planned to start in 2013, the firm said.

The firm holds a 39 percent stake and thus will secure an average of 4 million tons of coal annually, it said. Part of the amount from the Indonesian mine will be supplied to thermoelectric power plants in Korea, according to KORES.

“We expect that this contract will ensure the country’s a stable supply of soft coal and boost its energy security at the same time.” KORES chief executive Kim Shin-jong said.

“It is also meaningful that we succeeded in an early procurement of a resource whose demand is expected to surge in the future.”

Kim projected that Korea will be able to diversify its overseas resource markets, rather than relying too much on Australia, with its latest coal mine deals in Indonesia and South Africa.

KORES signed a $13.8 million deal to purchase a stake in a bituminous coal mine in Vlakplaats, South Africa, from Australia-based Continental Coal last year.

Indonesia is the 6th-largest producer and the second-largest exporter of soft coal.

Korea brought in 37 million tons, or 35 percent of its total domestic coal imports, from the Southeast Asian country as of last year, according to KORES.

By Koh Young-aah (youngaah@heraldcorp.com)