HIROSHIMA - Chugoku Electric Power Co. said Monday it will acquire a 10 percent interest in an Australian coal mine owned by a Japanese oil refiner to secure a stable source of fuel for its power plants.
The Hiroshima-based utility will pay an undisclosed sum for the stake in the Boggabri mine in New South Wales, according to a contract concluded with Idemitsu Kosan Co. on Monday.
Japanese utilities are under pressure to secure new sources of fossil fuels amid a general freeze in nuclear power generation since the 2011 triple meltdown.
Chugoku Electric, which serves the westernmost part of Honshu island, depends on coal for about half of the output from its power plants.
It has set up a wholly owned subsidiary in Australia to participate in the mining there, which began in 2006.
The utility said its current plan foresees the Boggabri mine producing about 5.4 million tons of coal annually, rising further from 2015.
The contract grants Chugoku Electric access to about 700,000 tons of coal from the mine. It buys about 6 million tons annually from all sources.
“While we are making thorough efforts to increase business efficiency, it is important to implement measures to expand profits in the long term,” Managing Director Akira Sakotani told a press conference in Hiroshima.