South Korea scouts for energy in Central Asia

Monday, 12 May 2008

South Korean prime minister Han Seung-soo today sealed a deal to secure 2600 tonnes of Uzbek uranium.

 

Han Seung-soo and Shavkat Mirziyoev during a visit to the Almalyk Mining and Metallurgical Combine, where copper, gold, silver, lead and zinc are mined

The deal could be the first of many for Han, as he continues a ten-day tour of Central Asia. He will visit Kazakhstan, Turkmenistan and Azerbaijan, meeting those countries' leaders and discussing energy issues among other things.

 

Han met with his Uzbek counterpart, Shavkat Mirziyoev, immediately before executives from both countries signed the deal. Some 2600 tonnes of uranium would be purchased by South Korea between 2010 and 2016 according to the deal, which is worth $400 million. All the nuclear fuel for Korea's power reactors is manufactured by Korea Nuclear Fuel, a subsidiary of Korea Electric Power Company (Kepco).

 

South Korea employs 20 nuclear reactors to generate 40% of its electricity. It is currently building three more. The deal with Uzbekistan amounts to around 9% of South Korea's annual demand for uranium, all of which must be imported. In fact, some 97% of South Korean energy supplies are imported, making the rising cost of oil and gas a major concern.

 

In addition to uranium commitments, the leaders agreed to establish a 50-50 joint venture on oil exploration in Uzbekistan and to jointly develop molybdenum and tungsten mines.

 

A memorandum of understanding (MoU) was signed for cooperation in joint development of energy and engineering components. South Korean businesses will have exclusive use of a business park in the capital, Tashkent, as well as take roles in redevelopment of outlying areas of the city and modernization of an airport.

 

A South Korean official said that the MoU gives it access to precision technologies developed by the former Soviet Union. South Korea will provide $120 million in economic aid to Uzbekistan.