General trading companies here have been scrambling to take possession of coal mines abroad as the mineral reemerges as an alternative source of energy to crude oil.
The global nuclear phobia, following the explosion of Japan’s Fukushima nuclear power plants early last year has also promoted traders to secure coal deposits, expecting its prices will continue to head upward on growing worldwide demand.
LG International, the general trading arm of LG Group announced that it acquired 60% stake in an Indonesian coal mine developer for KPW 242.8 billion.
An LG International spokesman said that we have secured an exclusive right to operate mines owned by PT. Ganda Alam Makmur and sell coal produced from them. We made a giant step toward becoming a leading global coal supplier. The company will continue seeking to acquire more coal mines overseas. The company also owns coal deposits in China, Australia and Russia.
He said that we think coal has emerged as a viable alternative energy source to crude oil as the value of black gold has surged in recent years. It makes more sense businesswise given the geopolitical sensitivity of crude oil. Coal is highly energy efficient and cost effective in generating electricity.’
Public concerns have grown over the safety of nuclear power plants following the meltdown of the Japanese nuclear power plant. Last year’s nuclear plant explosion has made governments around the world more nervous about relying on nuclear energy for generating electricity.
The spokesman said that additionally, the use of solar and other renewable energy sources has largely remained in stalemate due to their low economic feasibility. For the time being, we believe coal is the most reliable, cost effective and environment-friendly energy for electricity generation.
SK Networks, the general trading arm of SK Group are also engaged in several coal mine development projects in Australia, China and Indonesia while Daewoo International affiliated with POSCO are developing mines in India and Africa.
Global coal consumption has expanded at an explosive pace in recent years. The world was found to have consumed a total of nearly 3 billion tonnes of coal in 2011 up from 701 million tonnes in 2007.
According to the US Energy Information Administration, countries will use more coals over the next 2 decades for power generation and other purposes. It forecast that coal will be responsible for producing 12.9 trillion kilowatts per hour in 2035 up 67.5% from 7.7 trillion KW in 2008.
Source - Korea Times
(www.coalguru.com)
