Securing Coal Mine in Mongolia

Korea Coal Corp. exerts efforts to make it profitable by operating coal mines overseas and coal gasification

Korea Coal Corp. has recently secured the 51 percent stake in a coal mine in Mongolia after a seven-year long negotiation with the Mongolian authorities over the stake in the Khotgor coal mine some 1,300 km from Ulaan Baatar, the capital of Mongolia, according to state-run coal exploration company recently.
President Lee Kang-hoo should take a lot of credit for the successful operation since he was a major force behind the move to achieve the strategic objective for the coal mining company as the company had to take care of many matters to finalize its deal in Mongolia including securing private strategic investors in the private sector and getting more funds from the government to support its financial conditions. The CEO’s administrative and know-how on energy area have been of a great help in bringing the deal to a successful conclusion, company officials said.
The coal company has been providing coal at the prices decided by the government mainly to support poor households which have to rely on inexpensive coal briquettes for cooking as well as heating their homes.
But the Mongolian deal is about to end the company’s operation in the red. The coal reserves of Khotgor coal mine is estimated at 100 million tons and there are many opportunities for the coal company to find new business areas in the North Asian country as it is endowed with massive natural resources, ranked the fourth in the world and more coal reserves are expected to be found in the country perhaps four times more than already discovered, the officials said.
Mongolia has such a large coal reserves and the Korean coal company cannot fail in its operation in the coal mining in Mongolia although many Korean companies have failed in their overseas operations to search for natural resources.
President Lee is fully aware that coal will continue to be used only when environment is protected from the use of coal will have such as air pollution. He said clean energy and the development of green energy would be a core force for national competitiveness and growth engines in the future, especially, the development of technologies for clean coal would take up a major part of the new growth engines. This is the reason why many countries in the world including the United States, Japan, China and South Africa have been engaged in the development of clean coal and commercial use of clean coal with new technologies. As such the coal corp. has also been undertaking the clean coal technologies, along with the operation to secure more coal mines abroad. One project that the coal company has been pushing the plan to develop robots to take place of human miners to dig for coal in underground tunnels. Robots will cut costs and accidents by improving working conditions at mines. The project has been pushed jointly with the KAIST, the Korea Machinery Development Institute and Hydrometics Inc. and they produced the first robot in January for tests and in the first half of this year, they will be tested in Hwasoon Coal Mine.
These robots can also be employed in the exploration of other natural resources underground and other extreme conditions as they can be remotely controlled including disaster rescue missions and anti-terror activities. Lee said he expected that those robots can be employed at coal mines operated by the coal corp.around the country from2012 to boost the productivity by 10 percent and improve the bottom lines of the company by 10 billion won annually. The CEO also said the coal corp. has been engaged in a project to gasify coal under its mid & long-term plan, along with plastic waste mixture to produce clean energy. He said the project successfully completed the pilot stage of research and development for gasification of domestic coal/plastic waste mixture fuel (1 ton per day) Currently testing the mixture fuel gasification equipment with a commercializing capacity of producing 10 tons per day and it is in the planning the architectural design of mixture fuel manufacturing factory, its location, and supply lines
Lee said the project will test supply and commercialize gasification business in this year;
- Increasing the number of Co-fired red brick, fireproof materials, tile and other co-fired material business up to 90.
- Enhancing the possibility to substitute for small and medium sized kerosene boilers at paper and chemical manufactories.
Expected Effect
To produce clean fuel using waste materials and fossil fuel to reduce oil import.
- Fuel cost for a co-fired red brick manufactory: about 1.0 billion per year
One mixture fuel manufactory producing 100 thousand tons a year with 30 gasification equipments can expect about 4 billion won of net profit a year.
- The investment for constructing a factory with capacity of 100 thousand tons a year is expected to be 20 billion won. nw

Korea Coal Corp. President Lee Kang-hoo and his Mongolian counterparts hold copies of an agreement for Korea Coal Corp’s take over of 51 percent stake in the Khotgor Coal Mine in Mongolia, signed last year after long protracted negotiations.