Table of Contents
- The 74-Year History of Korea's Coal Corporation: Putting a Period in June 2025
- After the Closure of Dogye Mining Shaft: The Choice of 'Liquidation'
- Demands for Full Retirement and Union Resistance
- Measures for the Local Economy Remain 'Under Review'
- Need for a New Model for 'Just Transition'
- The Industrial Complex: No Exception for Public Enterprises… Need for Policy Shift Based on 'Closure'
- Frequently Asked Questions (FAQ)
The 74-Year History of Korea's Coal Corporation: Putting a Period in June 2025
The Korea's Coal Corporation, established in 1950 as the first public enterprise in Korea, will ultimately enter a liquidation process.
In the past, at a time when coal was valued more than oil, this company was regarded as one of the best workplaces. However, the number of employees, which was 13,000 at its peak, has drastically decreased to 187 as of June 2025. With the closure of the last remaining state-owned coal mine, the Dogye Mining Shaft in Samcheok, all operations are expected to come to an end.
This decision is expected to be marked as an important milestone related to the survival of public enterprises, the local economy, and worker protection, beyond just the closure of coal mines.
After the Closure of Dogye Mining Shaft: The Choice of 'Liquidation'
The government eventually excluded the merger proposal with the Korea Mine Reclamation Corporation and shifted to a standalone liquidation of the coal corporation.
The reason behind this decision is that the total debt expected from the merger of the two public enterprises was projected to exceed 11 trillion won, raising concerns about an annual interest burden of 440 billion won.
Therefore, the government decided to fully assume the 2.5 trillion won debt of the coal corporation and proceed with the dissolution process without any separate mergers.
This situation clarifies the point that 'public enterprises are not eternal.'
Demands for Full Retirement and Union Resistance
On June 10, 2025, the Ministry of Industry notified all employees of the coal corporation to apply for 'voluntary retirement' by June 30. This measure is to proceed in the form of 're-employment support' instead of layoffs, but the union has entered into a tent sit-in protest in front of the Ministry of Industry on Sejong-daero, Seoul. In particular, they demanded employment succession for 16 low-ranking employees in their 30s and 40s, but the government is refusing this on the grounds of exceeding the staffing quota and job mismatches.
A labor policy expert stated, “ILO Convention No. 158 encourages the succession of employment when the same job is transferred.” However, he added, “It cannot be seen as the best social solution to succeed all employees.” This situation is likely to set a significant standard for future restructuring in the public sector.
Measures for the Local Economy Remain 'Under Review'
Financial support and employment transition models to alleviate the economic impact on the abandoned mine areas are under preliminary feasibility review.
Proposed measures include plans to create a medical industry cluster utilizing heavy ion accelerators in Samcheok and to attract facilities for clean methanol production in Taebaek. Additionally, Hwajun is pushing for tourism development in the abandoned mine area.
However, the Ministry of Strategy and Finance has stated, “It will be difficult to make a decision by the end of this month due to the procedural nature of the preliminary feasibility review.” In this situation, strong resistance movements are expected to arise in the Gangwon region, including large-scale protests.
Need for a New Model for 'Just Transition'
We are currently at a point where in-depth discussions about 'Just Transition' are necessary. Simply paying severance benefits will not fully resolve the social aftereffects brought about by the dismantling of public enterprises.
In response, the government, Gangwon Province, and local municipalities in Wonju are proposing practical support measures as follows. First, they plan to operate a short-term transition technology training campus for six months in conjunction with the RE100 industrial complex. Second, they will provide vouchers to support startups in tourism and cultural content in coal mining regions. Finally, they intend to introduce a local employment priority quota for public institutions centered around energy and environmental public enterprises.
Such support measures are expected to positively impact the restructuring models of other public sectors, such as shipbuilding and gas, in the future.
The Industrial Complex: No Exception for Public Enterprises… Need for Policy Shift Based on 'Closure'
Public enterprises and their associated industrial complexes are not permanent entities. The case of Korea's Coal Corporation clearly illustrates this fact. Amid changes in industrial structure, energy paradigm shifts, and fluctuations in social trends, public enterprises that played significant roles in the past are at risk of closure at any time. This situation equally applies to other public institutions.
Accordingly, the government and local governments must break away from policies assuming the sustainability of public enterprises and initiate institutional changes considering liquidation. This goes beyond mere restructuring issues and must include the government's responsibility for community safety nets and worker protection.
It is crucial to institutionalize the 'just termination model for public enterprises facing industrial closure' to avoid similar situations in the future. Additionally, it is an urgent reality to prepare proactive support and local transition programs. Such changes will be essential measures to protect the future of communities and workers in crisis situations faced by public enterprises.
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Frequently Asked Questions (FAQ)
Q. Why did Korea's Coal Corporation decide to close down in 2025?
They are entering liquidation and closure procedures in June 2025 due to a decrease in coal demand and operations.
Korea's Coal Corporation, established in 1950, at one time employed 13,000 people, but the number has drastically decreased to 187 due to changes in the energy paradigm focused on coal. With the closure of the last state-owned coal mine, the Dogye Mining Shaft in Samcheok, they will completely shut down operations and begin liquidation procedures in June 2025. This is considered an important milestone in the decline of the coal industry and restructuring of public enterprises.
Q. Why did the government choose the standalone liquidation of the coal corporation?
They made this decision due to concerns over increased debt and interest burden with a merger.
The government excluded the merger proposal with the Korea Mine Reclamation Corporation due to concerns that the total debt would exceed 11 trillion won with an annual interest burden of 440 billion won. As a result, they decided to fully take over the 2.5 trillion won debt of the coal corporation and proceed with standalone liquidation without a separate merger. This decision clearly demonstrates that public enterprises are not permanent entities.
Q. What is the situation with the voluntary retirement of coal corporation employees and union resistance?
The union is protesting the voluntary retirement notification and is currently staging sit-ins.
On June 30, 2025, the Ministry of Industry demanded that all employees of the coal corporation apply for voluntary retirement, but the union protested this and started a tent sit-in. In particular, some low-rank employees in their 30s and 40s demanded employment succession at public institutions, but the government rejected this on the grounds of exceeding the staffing quota and job mismatches. This process is expected to significantly influence the establishment of standards for future restructuring in the public sector.
Q. What measures are being taken for economic recovery in the abandoned mine areas?
They are currently under preliminary feasibility study for financial support and industrial transition models.
Proposals have been made for economic revitalization plans such as creating a medical industry cluster, attracting clean methanol production facilities, and developing tourist areas in Samcheok, Taebaek, and Hwajun, which are abandoned mine areas. However, the Ministry of Strategy and Finance stated that it is difficult to make specific decisions by the end of the month due to the preliminary feasibility study. Therefore, the possibility of resistance from local residents is also increasing.
Q. What support measures are envisioned for 'Just Transition'?
Support includes technical training, startup support vouchers, and local employment priority quotas.
The government and local authorities are taking into account the social repercussions resulting from the dismantling of the coal corporation, such as operating short-term technical training linked to the RE100 industrial complex, providing vouchers to support startups in tourism and cultural content, and planning to introduce local employment priority quotas for public institutions related to energy and the environment. Such measures are expected to focus on protecting workers and recovering local economies after the dismantling of public enterprises.
Q. What lessons does the closure of Korea's Coal Corporation offer regarding public enterprise policy?
It shows that public enterprises also have limits on sustainability and that a shift in liquidation policy is necessary.
The case of Korea's Coal Corporation illustrates that public enterprises are not eternal in the face of changes in industrial structure and shifts in the energy paradigm. The government must move away from policies that assume the sustainability of existing public enterprises and pursue institutional changes that consider closure and liquidation. This is a responsibility that extends beyond mere restructuring and must include community safety nets and worker protection, making the establishment of a just termination model for public enterprises an urgent issue.