Kangwon Land revenue eyed to clear $1.67B Korea Coal debt

South Korea’s Ministry of Trade, Industry and Resources is reviewing a proposal to use a portion of annual revenues from Kangwon Land to help resolve the mounting debt of the Korea Coal Corporation (KOCOAL), according to a local media report.

A draft “KOCOAL liability resolution plan” prepared by the ministry outlines a measure under which around 10 percent of Kangwon Land’s yearly revenue could be allocated toward repaying the coal company’s accumulated liabilities, which stand at about KRW2.5 trillion ($1.67 billion).

Kangwon Land is South Korea’s only casino open to local players and was established to support economic development in regions affected by mine closures.

According to ChosunBiz, the proposal forms part of broader efforts by the Ministry of Trade, Industry and Resources to address the financial deterioration of KOCOAL, which shut its final operating mine in June of last year and now relies solely on sales of stockpiled coal.

The report noted that a long-term financing strategy involving Kangwon Land had already been outlined in a ministry-commissioned service report on improving KOCOAL’s financial condition last year. That study suggested adjusting statutory levy rates paid by Kangwon Land to existing funds, including the Tourism Promotion and Development Fund and the Abandoned Mine Area Development Fund, which currently account for 10 percent and 13 percent of gross sales, respectively. Part of these contributions could then be redirected to service KOCOAL’s debt.

As an alternative, the report proposed creating a new “coal industry rationalization fund” that would be financed by setting aside a fixed share of Kangwon Land’s annual revenue. Based on Kangwon Land’s 2024 revenue of KRW1.43 trillion ($971.7 million), allocating 10 percent per year could allow the full repayment of KOCOAL’s liabilities over roughly 20 years, according to the analysis.

The plan is described as an integrated execution strategy involving the Korea Mine Rehabilitation and Mineral Resources Corporation, which holds a 36.27 percent stake in Kangwon Land. A ministry official said there is a policy direction for Kangwon Land to play a role in resolving KOCOAL’s debt, adding that the proposal could be finalized after interagency discussions scheduled for February.