Korea Electric Power Corp., South Korea’s biggest electricity provider, is in talks to buy Australian uranium assets this year to meet demand for the nuclear fuel, an executive said.
“We’re talking with some Australian companies, so I think we can get a result this year,” Chung Jae Wan, general manager of the energy resources team at the utility known as Kepco, said in an interview today. Kepco is open to buying a stake in a project or a company, he said.
South Korean uranium demand is expected to double to 8,000 metric tons a year by 2020 because of increased construction of nuclear power plants, Chung told a conference earlier in Perth. South Korea, which imports about 97 percent of its energy requirements, plans to add eight atomic plants by 2016.
Kepco wants to buy mines that are in the construction stage, and isn’t interested in companies that only have exploration projects, Chung said. The Seoul-based utility is now progressing toward its goal.
“Given the uranium price, operating costs need to be reasonable,” he said. “If they’re too high, it cannot be developed into a mine. We need to be very cautious. We need some projects with reasonable operating costs which can be developed into mines under the current uranium price.”
Spot-market uranium prices fell 6.7 percent between the start of this year and early May on reduced purchases from China and concerns about U.S. Department of Energy plans to cut uranium inventories.
In remarks to the conference, Chung said Kepco is “taking steps” to increase its holdings in uranium resources. “We will need one or two investments in uranium mines every year,” he said. Kepco is keen to buy stakes in uranium mines in Africa, Mongolia, Australia and Europe, the company said in March.
South Korea currently operates 20 nuclear power plants and had imported its uranium mainly from Canada, Australia and Kazakhstan until Kepco invested in overseas mines last year.
Australia’s proposed tax on resource company earnings won’t have a bearing on the South Korean company’s potential investment because Kepco is focused on uranium security more than the profitability of any purchased asset, Chung said.
“Kepco is a very big company,” Chung said. “We don’t have any limits in our investments. It depends on how attractive the investment is to Kepco.”
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