Coal production necessary to keep ahead of prices

CHINA Guodian Corporation, one of China's five leading power producers, has received permission to expand its main business into coal mine development in an attempt to overcome rising thermal coal contract prices.

Angie Tomlinson

Guodian received approval from the state-owned Assets Supervision and Administration Commission to take part in coal mine development, official Chinese news service Xinhua reported.

The company already has some coal mine assets, and has started its coal business in the Shanxi and Inner Mongolia regions of China.

“With more coal resources in hand, Guodian can offset the increasing cost for the raw material to some extent," Liang Dunshi from the China Coal Transport and Distribution Association told Xinhua.

With coal prices for power generation up 10% this year, many of China's domestic power producers have made forays into coal.