Residents say lives ruined by South Korea oil spill

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TAEAN, South Korea, Dec 12 (Reuters) - South Korean officials say they have made progress in cleaning up the country's worst oil spill but residents worried on Thursday about ruined livelihoods and conservationists saw damage lasting for years.

More than 10,000 residents, soldiers and volunteers were working to clean blackened beaches about 150 km (95 miles) southwest of Seoul and remove oil from a nature reserve five days after a barge carrying a crane punched holes in a crude oil tanker, triggering a 10,500-tonne leak.

Local officials said oil had been removed from about 70 percent of Mallipo beach, one of the worst-hit areas. Other beaches were coated with crude some 10 cm (4 inches) deep while the air was foul with the stench of sulphur.

"There's been a lull in the oil spreading," said a Taean coastguard official. About 50 km of coastline has been hit so far but shifting winds on Thursday could send the slick south and lead to oil washing up at places that have so far been spared.

Thousands of residents helped with the clean-up, saying there was nothing else to do now that tourism had died in a region famed for its sandy beaches. Fisheries ground to a halt.

Kim Soo-ha, 63, wept at her oyster farm as she held dead shellfish coated in tar.

"I sent my kids to college by making money from this," she said. "I don't know how I'm going to live. They say they can't do anything about it for the next 10 years."

Environmental groups say oil in the Taean seabed and the loss of food for aquatic species will cause damage to the ecosystem that will last for years.

Hotels in the region are vacant and several restaurants that catered to tourists posted signs in their windows reading: "The government needs to pay".

South Korea has declared the region a disaster area but initially freed up only a little over $6 million in aid. It has yet to give an estimate for the damage.

A maritime ministry official said the country lacked enough clean-up equipment and was ill prepared, Yonhap news agency said.

The leak is about a third of the size of the 1989 Exxon Valdez spill of crude oil onto Alaskan shores, the costliest on record. The clean-up alone from that disaster cost around $2.5 billion while the total cost, including fines and claims settlement, is estimated at $9.5 billion.

Beaches have been littered with dead fish and waterfowl covered in oil, and the area's oyster beds have been wiped out.

The conservation group Green Korea United said the chemicals used to break down the oil slicks could pose long-term health risks to workers.

"There's no telling how long it will take for things to come back to normal. It could take five years, 10 years -- we just don't know," said Park Young-jun, a village mayor. (Additional reporting by Jessica Kim in Seoul; writing by Jon Herskovitz; editing by Roger Crabb)