KEPCO to acquire 20% stake in Indonesian coal producer PT Bayan for $515 mn

South Korea's largest utility company, Korea Electric Power Corporation (Kepco) today said that it will acquire a 20 per cent stake in Indonesian coal producer PT Bayan Resources for about $515 million in order to augment its coal supplies.

Seoul-based Kepco will buy 667 million shares in PT Bayan for 7,000 Indonesian rupiah each, said Korea Electric in a regulatory filing.

"The firm expects this investment to help ease difficulties in securing and shipping Indonesian coal as Bayan Resources owns onshore and offshore terminals," Kepco said in its filing.

Kepco is Korea's premier utility company with an installed capacity of over 60,000 MW, also has operations in Philippines, China, Lebanon, Myanmar Libya and Nigeria.

With the PT Bayan stake, Kepco will get 2 million tonnes of coal a year from 2012 and 7 million tonnes annually from 2015, securing 34 percent of its coal requirement from the current 24 per cent.

Kepco has invested in Indonesian and Australian coal mines to secure 24 million metric tons of coal annually.

Last month, a consortium comprising Kepco acquired the entire stake of Anglo American's high quality Bylong bituminous coal mine for A$400 million ($340 million). The Bylong mine holds coal reserves of 420 million tons and a life of about 30 years. (See: Anglo American to divest five Australian coal mines to POSCO, KEPCO for A$580 mln)

Kepco had said at that time that it will produce 7.5 million metric tons of coal a year starting from 2016, which will double its independent production of coal from 12 to 24 per cent.