HONG KONG: China Coal Energy, the country’s No. 2 coal producer, is exploring investments in Australia and Indonesia while it doubles spending to ramp up production and feed the world’s largest coal market.
China Coal, the country’s largest coal producer after Shenhua Energy, also expected to export about as much of the hydrocarbon this year as it did in 2007, or 18.9 million tonnes, executives said on Thursday.
“We hope to keep exports at last year’s level,” said Jing Tianliang, chairman of listed China Coal and president of parent company China National Coal Group Corp.
“We are still negotiating export prices. But I don’t think they will be lower than the benchmark Australian prices to Japan,” he said.
Last week, Xstrata, the world’s largest thermal coal exporter, settled the 2008 thermal coal prices with Japan’s Chubu Electric at US$125 a tonne, FOB, up 125% from the previous year.
With Asian prices near records – or well above domestic prices – Chinese miners have been competing against each other to ship more abroad, with some deals done at US$135 a tonne.
China Coal, which like its peers is scouring the globe for resources to feed a hungry Chinese economy, won an initial quota this year to ship 13.15 million tonnes of coal abroad, out of a first batch of 31.8 million tonnes in quotas granted to the country’s coal exporters.
Armed with US$3.6bil cash from its initial domestic A-share sales earlier this year, China Coal intends to set aside 16.16 billion yuan (US$2.31bil) to build up its core coal and coal chemicals businesses this year as well as hunting for coal mines overseas, more than double the 7.14 billion yuan in 2007.
“We’re always seeking investment opportunities abroad actively and cautiously. We are doing feasibility studies,” Jing said.
Asked where, he said: “Australia, Indonesia and some other countries.” – Reuters