Bloomberg, The Japan Times, July 17, 2011

Itochu Corp., the nation's largest trader of coal for power stations, is seeking to invest in mines in Russia, Canada and Indonesia to tap rising global demand as the Fukushima nuclear disaster fuels a search for energy alternatives.

The trading company, which is seeking to double its coal assets by 2015, is targeting the three resource-rich countries to secure thermal and steelmaking coal supplies, Hiroshi Akiba, general manager at Itochu's coal department, said in an interview in Tokyo, without reveling specific sites or the size of investment.

"Our presence is still very small in the global coal trade," Akiba said Friday. "We will spend more on mines if and when we identify good projects to invest in."

The Fukushima nuclear accident may accelerate coal demand from Europe and Japan as the fuel is regarded as an alternative to atomic energy, Akiba said. Itochu agreed last month to pay $1.5 billion for a 20 percent stake in Drummond Co.'s Colombian operations to expand reserves.

Itochu expects the investment in Colombia, the company's biggest, will earn "well over ¥10 billion" in profits after tax as early as next year, Akiba said. Output at the Colombian operations may increase 40 percent from last year to 35 million tons by 2014.

Itochu plans to spend ¥800 billion over two years to expand in China and the resources industry, including investments in new coal projects in Australia and Brazil, the company said May 6.

Rising consumption in China and India will help boost global seaborne demand for thermal coal by 16 percent to about 868 million tons in three years, according to Daiwa Capital Markets.

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