The South Korean government Monday denied it has finalized plans for shutting down the state-run Korea Coal Corp. due to declining profitability.

“The government is currently mapping out a restructuring blueprint for state-run energy organizations, but nothing has been confirmed now,” said the Ministry of Commerce Industry and Energy in a statement. 


“Closing down coal mines is not possible without a mutual agreement between the workers and management.”

The ministry released an official statement about its stance on the coal corporation after local daily Chosun Ilbo reported the money-losing corporation is facing closure due to the nation‘s dwindling demand for coal briquettes.

Citing a government official, the report had said three of the corporation‘s coal mines would be shut down before it gets shuttered completely.

Amid declining demand for coal briquettes, the Korea Coal Corp. has over the past few years been posting annual losses that have accumulated to 100 billion won ($85 million). As of 2015, its deficit reached 1.5 trillion won.

Currently, only five coal mines -- three run by the Korea Coal Corp. and two by private companies -- are in service in Korea. The number reflects a drastic reduction from 347 mines in 1989. The production from the mines has also tumbled to 1.7 million tons in 2015 from 24.3 million tons in 1988.

By Shin Ji-hye (shinjh@heraldcorp.com)