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China's Top Coal Producer Plans to Lift Coal Price

Posted on: Saturday, 19 November 2005, 09:00 CST

China's top coal producer plans to lift coal price

BEIJING, Nov. 18 (Xinhua) -- China's largest coal producer, the Shenhua Energy Co. Ltd, which is listed in Hong Kong, may lift its coal price next year, the China Securities Journal said in a report on Friday, citing Shenhua Chairman Chen Biting.

Chen predicted the coal price will rise in the fourth quarter as winter comes and inland provinces begin to stockpile coals. He expected a high price level next year.

At present, the contractual price of the coal supplied by Shenhua is some 20 yuan (about 2.5 US dollars) per ton lower than that supplied by other coal producers in the country.

So, Shenhua will consider to raise the price next year in line with the circumstances then, Chen said.

Besides, Shenhua's performance will be boosted steadily next year as the Chinese government is closing small coal mines to improve coal mine safety, he added.

He also said that the slight coal price fall in the past two months would not have much unfavorable influence on Shenhua's performance this year, as 85 percent of its coal sale is realized through long-term contracts.

Chen also disclosed that the company is preparing for acquisitions in and outside China. Shenhua turned out 101.3 million tons of coal in 2004, accounting for over 5 percent of China's total. Its verified coal reserve amounted to 5.9 billion tons by the end of 2004.

The group aims to produce 200 million tons of coal and becomes the world's largest coal supplier and coal clean transformation base by 2010, said Zhang Yuzhuo, Shenhua's vice general manager while addressing the Euro-Asia Economic Forum held in Xi'an, capital of northwest China's Shaanxi Province.

Source: Xinhua News Agency - CEIS

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