Two Japanese firms are in negotiations over a stake in an Australian coal mine, as companies look to secure stable supplies of coal for power generation plants.
Chugoko Electric Power Co. said it will acquire a 10% interest in the Boggabri mine in New South Wales (NSW) from Japanese oil refiner, Idemitsu Kosan Co.
The Hiroshima-based utility will pay an undisclosed sum for the stake in the coal mine, as it looks to secure a stable source of fuel for its power plants, according to the Japan Times.
Japanese utility companies have been under pressure to provide power to customers, while also securing new sources of fossil fuels amid a general freeze in nuclear power generation – following the Fukushima nuclear disaster in 2011.
Chugoko Electric is one of many Japanese utility companies to have turned to coal in the wake of the disaster. The abundance of coal on global markets has driven the price of the black stuff down, while continued oversupply has meant coal prices stay low. The Japanese power company serves the westernmost part of Honshu Island, and relies on coal for about half its power generation output.
The utility said its current plan foresees the Boggabri mine producing about 5.4 million tpa of coal. This figure is set to rise further from 2015.
The contract grants Chugoku Electric access to about 700,000 t of coal from the mine. It currently purchases about 6 million tpa from all sources.
“While we are making thorough efforts to increase business efficiency, it is important to implement measures to expand profits in the long term,” Managing Director Akira Sakotani said.
Edited from various sources by Sam Dodson
Read the article online at: https://www.worldcoal.com/power/19082014/japanese-utility-to-buy-stake-in-australian-coal-mine-1228/