December 10, 2009 / 7:30 AM / 10 years ago

J-Power may buy more US coal to diversify suppliers

TOKYO, Dec 10 (Reuters) - J-Power, Japan’s biggest coal consumer, bought 60,000 tonnes of thermal coal from Alaska, its first such purchase from the United States in six years, and may buy more as it seeks to diversify suppliers.

The company, officially known as Electric Power Development Co (9513.T), said on Thursday the coal was shipped in October for use at its 2,100-megawatt coal-fired Tachibanawan station in Tokushima in southwestern Japan.

“If it (Alaskan coal) is good, we can’t deny the possibility we would buy more on a contract basis,” a J-Power spokesman said.

The company declined to disclose the supplier but Alaska has only one, Usibelli Coal Mine Inc, with production averaging 1.5 million tonnes per year.

J-Power, which counts Australia and Indonesia as two major suppliers, has been looking to diversify sources and has bought coal from China, Russia and South Africa.

But the company, Japan’s biggest electricity wholesaler, said it is always looking for new coal to offset declining imports from China where domestic consumption is strong.

Imports from Australia are stable, but unexpected incidents like the heavy rains and flooding that hit coal output in the key mining state of Queensland last year served as a wake-up call for the need to diversify.

J-Power stopped U.S. coal imports in 2003 due to the high cost of transporting it by rail from mines in the continental United States to be shipped from Los Angeles, the spokesman said.

Japan imported 71,351 tonnes of thermal coal from the United States for $47 a tonne on average in October, boosting total U.S. imports in January-October to 106,663 tonnes, Ministry of Finance data showed. [ID:nT1032]

The U.S. imports were half the cost of $99 a tonne on average for those from Australia.

J-Power buys around 20 million tonnes of thermal coal annually. (Reporting by Osamu Tsukimori; Editing by Chris Gallagher)

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