By Yoon Ja-young
SK Group, the country’s third largest conglomerate, is set to acquire a controlling stake in an Australian mining company.
SK announced Monday that its subsidiaries including, SK Networks, will acquire a combined 40 percent stake in Cockatoo, an Australian mining company, in a deal worth between 300 billion and 400 billion won. The acquisition is to be completed within the first half of this year.
Cockatoo is extracting coal from 13 mines in Queensland and New South Wales. The mines are estimated to hold 1.5 billion tons of coal, which is 15 times larger than the annual 100 million tons imported by Korea.
SK has secured 2 million tons of coal annually through mining businesses in Australia and China. As Cockatoo is expected to produce 3 million tons in 2015, and 12 million tons in 2019, the deal will help the country pull up its energy self-sufficiency rate. The country currently relies 100 percent on imports for bituminous coal.
The acquisition follows the group chairman Chey Tae-won’s emphasis on resource development. He has sought globalization of SK Group, which had previously focused on the domestic market; and resource development overseas, ranging from oil and gas to coal and iron ore, was at the forefront of this drive.
SK already acquired 7.42 percent stake in Cockatoo in 2006, and has expanded its mining business in Australia since then, from being a stakeholder to directly managing the firm. Chey showed passion for the mining business, visiting a mine in February last year. The acquisition is to complete SK Group’s value chain in the sector, ranging from exploration of mines to the sale of coal. It plans to seek more acquisitions overseas in the oil field development business.
The deal will be complete within the first half of the year after SK subsidiaries get approval from the board for funding.
“We are seeing notable results of our global business following the chairman’s efforts, including an Internet business deal with Dogus Group and a thermal power plant project in Turkey as well as a chemical plant construction project in China,” said Lee Man-woo, a spokesman of SK Group. He said the group will continue seeking success in resource development.