SAEROMI SHIN
KOREA Electric Power yesterday said it had signed a n agreement on uranium mining with Areva.
The partnership followed the utility’s purchase of a 10% stake in the Imouraren uranium mine in Niger, the Seoul-based company, also known as Kepco, said.
Korea Electric and unit Korea Hydro & Nuclear Power said on December 10 they would buy shares in a unit of Paris-based Areva, the world’s biggest maker of reactors, which owns the mine.
South Korea, which operates 20 nuclear power plants, plans to add eight more by 2016 as Asia’s fourth-largest oil importer seeks to reduce its dependence on crude. Kepco said it aimed to secure as much as half of its uranium needs by developing mines overseas by 2020, and to buy more stakes in African and central Asian producers this year.
“It’s the right move as Kepco tries to reduce the impact of changes in raw material prices,” said Joo Ick Chan, an analyst at Eugene Investment & Securities who rates the stock “buy” with a share-price forecast of 60000 won. Korea Electric was also seeking to boost exports of nuclear plants, Joo said.
The utility was in discussions with at least five countries to build nuclear-power plants, Chung Kun Mo, an adviser to Kepco, said last month. Kepco led a consortium to win a tender in the United Arab Emirates worth 40bn for four nuclear plants in December.
Vietnam was planning a similar deal this year and many other countries, from Italy to Indonesia, were hoping to build new reactors soon, said the Economist.
Kepco had hinted that it was eyeing Vietnam, as well as other middle-income countries such as Turkey, Jordan, Indonesia, Thailand and SA, the Economist reported last week.
Korea Electric fell 1,3% to 39000 won on Friday . The stock has climbed 14% this year, compared with a 6,9% drop in the benchmark Kospi index.
Kepco narrowed its loss in the latest quarter after economic recovery in Korea spurred sales, natural gas costs declined and the government let it raise prices.
The utility last week reported a net loss of 366,4-billion won (315m) for the three months ended December 31, compared with its record quarterly deficit of 2,16- trillion won a year earlier.
Korea Electric said it expected the partnership with Areva to lead to participation in future uranium projects with the French nuclear power company.
Kepco’s new deals have moved on to the turf of six big firms that have dominated the industry for decades: GE and Westinghouse of America , Areva of France, and Toshiba, Hitachi and Mitsubishi Heavy Industries of Japan. Bloomberg, Staff Writer