* Chinese, Indian utilities made long-term supply
* STX to supply 65,000 T/yr to S.Korea utility EWP
* Indonesia coal mine to produce 200,000 T/mth from June
* STX to invest in other Indonesian mines to boost capacity
(Recasts lead, adds details and quotes)
By Cho Mee-young and Rebekah Kebede
SEOUL/PERTH, March 31 South Korea's STX Corp
, aiming to boost its coal trading by investing in
overseas mines, said on Thursday that it has received long-term
supply requests from Chinese and Indian utilities which expect
rising demand after Japan's quake.
STX also said in a statement that it had bought a 40 percent
stake in an Indonesian coal mine located in Kintap, Kalimantan
from PT Indonesia Cemerlang for $30 million, earning mine
operation and sales rights for all coal output.
Japan's worst quake on record and subsequent tsunami on
March 11 shut several power plants and ports, and forced at
least two major Japanese utilities to declare force majeure on
The quake reduced short-term coal demand and weighed on
regional coal prices, but is expected to boost demand in the
long term as it replaces nuclear power with Japan grappling with
the worst nuclear crisis since Chernobyl in 1986.
"Chinese and Indian utilities had been set as our main
target markets for coal supplies. What happened is that we
actually have received long-term supply requests from them even
before we made offers," said a source at STX who declined to be
named as he was not authorised to talk to the media.
TIGHTER COAL MARKET SEEN
Analysts said Japan's nuclear crisis would tighten the coal
market globally in 2011, as governments reconsider the safety of
Pressure mounted on Japan on Thursday to expand the
evacuation zone around its stricken nuclear power plant while
officials said radiation may be flowing continuously into the
nearby sea, where contamination was now 4,000 times the legal
"In the case of thermal coal, we expect that utilisation
rates at (Japan's) coal fired plants may be increased modestly,"
Deutsche Bank said in a note earlier this week.
"We would suggest that an increase of another 0.5 to 1.0
million tonnes of thermal coal per month could be possible as a
run rate by the second half of the year."
Separately, the STX statement said the firm had already been
chosen to supply 65,000 tonnes annually to Korea East West Power
STX said it aims to boost its total annual coal capacity to
over 5 million tonnes by investing in neighbouring mines to
"We are planning to supply coal from the mine to domestic
and overseas markets to maximise profits," STX said, referring
to the latest coal mine deal.
The Indonesian mine was currently producing 100,000 tonnes
per month, and monthly output will rise to 200,000 tonnes by
The statement said the deal would help STX Energy, which
consumes about 4.5 million tonnes of coal per year and also is a
unit of STX Group along with STX, ensure stable coal supplies.
(Additional reporting by Yerim Kim in SEOUL; Editing by Manolo