Peabody, Shenhua team up for Singapore presence

INTERNATIONAL producer Peabody Energy and China’s largest miner Shenhua Group have created a Singapore-based joint venture company that will allow both to feed the region’s hunger for coal imports.
Peabody, Shenhua team up for Singapore presence Peabody, Shenhua team up for Singapore presence Peabody, Shenhua team up for Singapore presence Peabody, Shenhua team up for Singapore presence Peabody, Shenhua team up for Singapore presence

 

Donna Schmidt

In a joint confirmation, the companies said the Sino-Pacific Coal Trading Corporation will supply Shenhua’s increasing demand with thermal coal from Peabody’s worldwide production and trading portfolio.

The agreement, which will be equally held by the pair, is a significant milestone for Peabody’s growth strategy in Asia, according to Asia and trading president Christopher Hagedorn.

“Globally, Shenhua is one of the world's largest importers of thermal coal and this important partnership will give Peabody a priority position to supply Shenhua's growing import needs with coal from Peabody's expanding global platform," he said.

In the next five years, he added, annual world coal demand is expected to grow by 1.2 billion tonnes – more than 80% of which is expected to come from global demand growth in both China and India.

“Over the last decade, Peabody has been reshaping its global platform to better serve this high-growth region," he said.

Sino-Pacific Coal Trading Corporation is still subject to regulatory review but should begin operations next year.

It said it would source coal from “key global supply basins” to give Shenhua the thermal coal needed to fuel its Chinese generating subsidiaries.

The news follows Shenhua’s announcement last month that it had increased its saleable coal output 14% year on year to 27.3 million tonnes in October and also sold 71% more coal than it produced for the month.

With stockpiles shrinking as China moves closer to peak winter energy consumption, Shenhua said it hit 46.7Mt of coal sales last month, a 15% rise year on year.

About 2.5Mt of it came from imported coal – a 212.5% increase year on year.

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