The $A16.8 million agreement sees 40 million fully paid ordinary shares from Cockatoo bought by the utilities and a purchase agreement in which KEPCO and EWP have the first right of refusal to purchase the greater of either 2 million tonnes of thermal coal from the mining company per annum or the percentage of Cockatoo's thermal coal production equal to its percentage ownership of Cockatoo.
KEPCO is owned by the Korean Government and supplies about 90% of power to the country. KEPCO subsidiary company EWP consumes more than 11.5Mt of bituminous and sub-bituminous coal per annum and this is forecast to rise to over 18.5Mtpa by 2016.
Cockatoo plans to use the funds from the share transaction to support exploration and development of existing projects and said the relationship formed with KEPCO is integral to establishing a link to the Korean market.
