The Ministry of Trade, Industry and Resources is reportedly reviewing the use of Kangwon Land's funds to resolve Korea Coal Corporation (KOCOAL)'s accumulated liability of 2.5 trillion won. Kangwon Land is the country's only casino open to Korean nationals, established under the Special Act on the Assistance to the Development of Abandoned Mine Areas to revive local economies depressed by mine closures.
According to a compilation of reporting by ChosunBiz on the 13th, the Ministry of Trade and Industry (MOTI) recently included a plan to use Kangwon Land funds in a draft of the "KOCOAL liability resolution plan."
KOCOAL has only been selling stockpiled coal since it closed its last mine, the Samcheok Dogye Mining Office, in June last year. As of the end of last year, KOCOAL's liability reached 2.4642 trillion won, and annual interest expense alone exceeded 80 billion won.
A long-term funding plan using Kangwon Land was also included in a commissioned "report on improving KOCOAL's financial situation" ordered by the Ministry of Trade and Industry (MOTI) last year.
The report proposed adjusting the statutory levy rates that Kangwon Land pays to the Tourism Promotion and Development Fund and the Abandoned Mine Area Development Fund (10% and 13% of gross sales, respectively) and using part of them to repay KOCOAL's liability.
In case adjusting existing funds proves difficult, it also presented an alternative to establish another "coal industry rationalization fund" to use a set percentage of Kangwon Land's sales as resources to resolve KOCOAL's liability.
The report said, "Under the abandoned mine area law, part of Kangwon Land's profits must be used for a certain period to promote tourism and regional development in abandoned mine areas," and analyzed that "if 10% of Kangwon Land's sales (1.4269 trillion won in 2024) is raised annually, KOCOAL's liability could be fully repaid in about 20 years."
This plan to use Kangwon Land funds was specified as an "integration execution plan with the Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR)." Because KOMIR is Kangwon Land's largest shareholder (36.27% equity), the corporation's management and decision-making role is inevitable in the funding contribution process.
An official at the Ministry of Trade and Industry (MOTI) said, "We have a direction that Kangwon Land should play a certain role in resolving KOCOAL's liability," and noted, "We plan to finalize the plan at the Public Institutions Management Committee after discussions at an interagency working group in February."