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US coal firm now in China
By Wang Ying (China Daily)
Updated: 2005-09-21 08:49
Seeing China's huge demand for energy, Peabody Energy, the world's largest private-sector coal company based in the United States, is looking at opportunities for both coal trading and investment in the country's coalmines.
The coal producer, whose products fuel more than 10 per cent of all US electricity consumed, yesterday announced in Beijing that it had officially opened its office in the capital city, to cash in on the country's growing energy needs.
"China has the fastest growing economy in the world and Peabody's China presence is a natural extension of our mission to be a world-wide supplier of low-cost energy," said Gregory H. Boyce, president of Peabody in a company statement.
China last year produced 1.96 billion tons of coal, with exports and imports reaching 85.92 million tons and 18.6 million tons respectively, statistics from the China Coal Industry Association said.
Coal currently makes up 70 per cent of China's total energy consumption.
Peabody Energy, currently having no tangible projects in China, aims to deepen ties with the Chinese Government and start partnership with the Chinese local coal companies such as China Coal and Shenhua Group.
"We will look at partnerships with the Chinese local coal firms instead of acquisitions of existing coal mines," Richard A. Navarre, executive vice-president and chief financial officer of Peabody told a news briefing yesterday in Beijing.
From the partnership, Navarre said, both sides will benefit from the particular strengths of each company.
The vice-president said they had not started talks with their Chinese counterparts over some firm projects, but are moving on to that end.
Navarre foresees robust demand for coal from the country's deepening urbanization and industrialization within the following years.
The country's long-term plan to consolidate the fragmented coal sector by grouping the small coal mines into fewer large coal-producing bases will render Peabody chances to bring in its practices, management and technologies, the vice-president yesterday said.
The company also plans to increase its coal trading volume with China, which now only takes a "very small proportion" of their total coal trades in Asia, Richard M. Whiting, executive vice-president for sales marketing and trading of Peabody, yesterday told China Daily after the briefing.
The US-based coal company collected revenue of US$3.6 billion by selling 227 million tons of coal products last year.
(China Daily 09/21/2005 page10)
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