Australia could offer North Korea cheap energy--daily

MELBOURNE, July 8 (Reuters) Australia is prepared to offer North Korea a cheap energy deal, probably coal shipments, if it returns to peace talks, as part of an attempt to solve the missile crisis, a national newspaper said today.

The Australian daily, in an unsourced report, said there had been a long-standing offer from the United States to provide North Korea with energy assistance for power generation in return for its co-operation.

''It is understood Australia has considered playing a role in such an agreement and would help with coal supplies if it would help solve the impasse,'' the newspaper said.

Australia is the world's second-biggest exporter of thermal coal, which is used in energy generation.

A spokesman for Prime Minister John Howard declined to comment on the report.

Yesterday Howard backed a joint Japan-U.S. resolution to the UN Security Council on North Korea after discussing Pyongyang's missile tests this week with U.S. President George W. Bush.

Bush spoke to Howard on an Air Force One flight from Washington to Chicago in further diplomatic consultations about North Korea, White House spokesman Tony Snow said yesterday.

''It was a 15-minute call and I think it's safe to say that they were very candid in assessing the situation and very determined to work together and they're confident that they're going to have a good result,'' Snow said.

He said Howard had offered to assist, but gave no details of how.

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