Korea Western Power Buys Some Australian Coal for $80 a ton

By Shinhye Kang

Feb. 20 (Bloomberg) -- Korea Western Power Co., one of six generating units of state-run Korea Electric Power Corp., agreed to take delivery of “some” Australian coal under 2009 contracts for $80 a metric ton, its chief executive officer said.

The price of coal, which fuels about 40 percent of South Korea’s power generation, may fall further, Son Dong Hee said on the sidelines of a conference in Seoul today.

Prices of coal used in power stations at Australia’s Newcastle port, a benchmark for Asia, have slumped more than 50 percent from a record in July on lower crude oil prices and concerns the global recession will curb demand. The cost of importing coal for South Korean utilities has also declined from a high of $199 a ton in July, according to Son.

The weekly index for Newcastle thermal-coal prices was at $80.24 a ton in the week to Feb. 13, according to the globalCOAL NEWC Index. Xstrata Plc, the world’s largest exporter of power- station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through the New South Wales port.

The annual price talks between overseas coal producers and South Korean utilities are still ongoing, Son said.

To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net.