Mitsui Mining May Develop Japan's First Coal Mine in 14 Years

By Yoshifumi Takemoto and Yasuro Komatsu

Oct. 28 (Bloomberg) -- Mitsui Mining Co., coke supplier to Japan's biggest steelmaker, is considering developing a mine in the northern part of the country, the first domestic coal project in 14 years.

``We will make a decision after watching the price movement and demand for coal,'' President Kiyoaki Ogura said in a Bloomberg television interview broadcast today, adding that the decision will be made by next year's spring season. ``We're also investigating the environmental impact.''

Mitsui Mining is searching for a mining block located about 10 kilometers (6.2 miles) away from an existing coal mine operated by its unit Hokkaido Sanko Petroleum Co. in Bibai city on the northern island of Hokkaido, Ogura said. The company is seeking a stable supply of coal because reserves at the current site are expected to dry up by March 31.

The unit produces 50,000 tons of coal for a power station operated by Hokkaido Electric Power Co. Sales of coal from the new mine would be limited to Hokaido Electric Power because transportation costs would increase if the material is shipped outside Hokkaido, Ogura said.

The shares fell 5.4 percent to 139 yen as of 9:24 a.m. on the Tokyo Stock Exchange.

To contact the reporters on this story: Yoshifumi Takemoto in Tokyo at ytakemoto@bloomberg.net; Yasuro Komatsu in Tokyo at ykomatsu@bloomberg.net