Korea Electric Seeks Australia Uranium Producer Stake (Update2)

By Jason Scott

May 8 (Bloomberg) -- Korea Electric Power Corp., South Korea’s biggest electricity provider, said it wants to buy a minority stake in an Australian uranium producer to expand supplies of the nuclear fuel.

“We are very strongly looking at Australian uranium projects,” Chang Joo Ok, vice president of resources development at the utility known as Kepco, said in Perth today. He declined to name potential targets. “We are focusing on companies producing uranium because we need to secure stable supplies. Maybe after that we would look at exploration companies,” he said after addressing a conference.

Australia, the second-largest uranium producer, has scope to expand exports of the nuclear fuel and liquefied natural gas to South Korea and gain from demand for cleaner energy, Resources and Energy Minister Martin Ferguson said April 6. South Korea, which imports 97 percent of its energy requirements, said in December it plans to increase the country’s nuclear power plants to 32 by the end of 2022 from 20 now.

“There’s plenty of potential partners for Kepco in Australia,” said Peter Strachan, a Perth-based analyst for independent company StockAnalysis. “Whatever it takes, from their point of view. They don’t necessarily want to get involved in the mining side, but they want to secure product.” He named Energy & Minerals Australia Ltd. and Toro Energy Ltd. as potential targets.

Korean Visit

Korea Electric wouldn’t be interested in buying a majority stake in an Australian producer, Chang said. The utility may consider participating in the management of a company in which it buys an equity stake by taking a seat on the board, he said.

Australian government energy department officials will visit South Korea to encourage companies to take up exploration opportunities when new offshore petroleum acreage permits are released for bids in June, Ferguson said last month. South Korea imports about A$14 billion ($10.6 billion) of products from Australia, including almost A$2.4 billion of crude oil, A$2.4 billion of coal and A$2.1 billion of iron ore, he said.

Uranium demand may rise as the number of nuclear power reactors potentially jumps 30 percent by 2020, driven by India and China, the World Nuclear Association estimates.

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To contact the reporter on this story: Jason Scott in Perth at jscott14@bloomberg.net

Last Updated: May 8, 2009 02:47 EDT