Korea Electric Power Corp. (015760.SE) has selected Germany 's RWE as its preferred partner to set up a joint-venture firm in coal trading, a Kepco official said Monday.

The official, who declined to be named, didn't specify a timeline or the country in which the JV company will be incorporated.

In July, Kepco's Executive Vice President & Chief Global Business Officer Chang Joo-ok said it is examining various options to protect itself from volatile fuel price movements, including increased investment in overseas resources and setting up a coal-trading company.

A coal-trading arm, possibly based in Singapore , would serve as a good "price-hedging vehicle" with the company aiming to set up a joint venture with an experienced foreign company by the fourth quarter of next year, Chang said then.

Five companies--two from Australia and one each from the U.S. , Germany and Switzerland --had been short listed to partner Kepco in coal trading, according to Chang.

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