Still Going Strong

After 6 decades, Korea Coal Corp. is still actively seeking bituminous coal from overseas for the steel and power industries

Korea Coal Corp. celebrated the 60th anniversary of its founding on Nov. 1 in a ceremony held at the Sejong Center in Gwanghwamun, downtown Seoul, on Oct. 29.
Minister Choi Kyung-hwan of the Ministry of Knowledge Economy, in his congratulatory speech, said the coal company has had its share of ups and downs in the past 60 years due mainly to changes in energy demand.
The government will do its best to take care of the coal industry in the future, and particularly Korea Coal Corp., which suffered from the financial crisis with debts amounting to 1.3 trillion won and 450 billion won in capital wiped out.
President Lee Gang-hu said in his anniversary speech that the Korea Coal Corp. has been contributing to the building of a base for Korea’s continuous growth in such areas as fuel switch, greenery in mountains and industrial development, among others, during its 60 years of history. The company has substituted energy imports to some degree by increased production and systematically exploring for anthracite coal reserves in Korea. The company also replaced wood that was burnt for heating and cooking in the country with coal briquettes to keep mountains and hills green as timber production was scaled down to a minimum. The coal industry did its share during the two oil crises that faced the country and helped the country to achieve the Miracle of the Han River with its creation of a base for such economic growth.
Now, Korea Coal Corp. has been looking to start overseas operations to mine bituminous coal, which is needed to generate power and produce steel, Lee said. First, the company will start with a bituminous coal mine in Nursk, Mongolia, this year and expand the operation from next year. The company has also been engaged in the production of gas from coal through the gasification process, which the company has successfully developed, the CEO said. The new technology has been producing clean gas and kerosene. The company also has succeeded in the development of high-productivity robots to replace coal miners. About 50 of them will be deployed in coal mines this year and early next year, making Korean mine operations overseas safer and more competitive.
Although the coal industry has been under dire conditions due to a slacking demand, the government will not be able to shut down the industry for good as coal still supplies 27 percent of the fuel demand in the country. The government has been providing a subsidy of 53 billion won annually to the industry.
The coal corporation has also been taking measures to help keep its operations above water. The company had its research institute work jointly with Korea Machinery Research Institute to develop robots to take the place of coal miners in the mines. The robot is 1.5 meters tall with arms that can stretch to four meters. If the company can boost its productivity 10 percent more by deploying the robots, it will earn 9.9 billion won more in income annually. The company plans to deploy 50 robots to the Hwasoon Mine in South Jeolla Province early next year and later to the Tokye and Jangsung Mines and others around the country. All coal mines in the country will have no trouble filling the vacancies left by some 200 miners due to retire in the next three years with robots.
The coal corporation also has turned its eyes overseas, especially to Mongolia, to expand its profits. The company invested in coal mines in Mongolia through a joint venture firm. Korea Coal Corp. holds a 51 percent stake and the Mongolian partners hold 49 percent. The joint venture firm invested 20 billion won in a coal mine in Nursk near the Russian border under a plan to mine 300,000 tons of bituminous coal annually, with coal production scheduled to start at the end of this year. The company plans to sell coal to the nearby Russian town.
The company got into problems when the government shut down six of nine coal mines in 1988 under its coal industry rationalization policy, although it kept the operation installations intact to keep the cost of operation the same for the company. Retirement pay for miners who were let go when the mines closed and other maintenance costs put the company into financial difficulty.
Furthermore, the company had to sell coal at a fixed price decided by the government. The production cost was 178,000 won per ton of coal, but the company can only sell the coal for 128,000 won per ton despite mounting losses for the company. nw

President Lee Gang-hu of Korea Coal Corp. gives his speech at the 60th anniversary of the company on Nov. 1 during a ceremony held on Oct. 29 at Sejong Center in downtown Seoul. Dignitaries view a robot to be put in coal mines replacing miners following the anniversary ceremony at Sejong Center.