Shenhua expands the non-power market with Chinalco to sign coal purchase strategic agreement

--yinhuangqing: Government intervention negotiation helpless coal price reach consensus our correspondent Zhang Yi is China Shenhua (1088) at the end of last month and the Chinese aluminum Industry (2600) signed a strategic agreement on coal procurement, marking the company towards the development of a new customer direction. 　　Shenhua board secretary Yinhuangqing, when interviewed by this newspaper, said in the four major industries downstream of coal, with the lowest coal price of electricity, expanding the non-electric market can bring better economic benefits for the company, so the company will take a walking on the future: neither give up the largest electricity market, but also gradually develop the non-electric power of building materials, steel and chemical market. Shenhua's coal was sold mainly to power companies in the past, with 233 million tonnes of coal sold in 08, which accounted for 83% of the total. Yinhuangqing that, as Chinalco's non-electric customers are priced by the market, the purchase price will be higher than the power plant. 　　Shenhua and the Chinalco agreement for 3 years, in addition to ensure the quality and quantity of coal supply, but also to seize the interests of both sides to establish a long-term non-power partnership. Production of coal exceeding target year Shenhua has said earlier this year that it will increase its production targets from coal, yinhuangqing, according to the current economic situation, the first 4 months of this year has produced 69.3 million tons, so very confident that the target can be achieved, 　　It can be estimated at current output to reach 20,800 tonnes a year, higher than the original target of 19,600 tonnes, but the target will not be raised in view of market conditions. Shenhua's April electricity generation and sales fell by 6.4% and 5.5% respectively, asked whether and in recent years, the country vigorously promote environmentally friendly clean energy, wind, hydro-electric power increasing, yinhuangqing not to say that there is a little impact, but he explained that April national power generation fell 3.5%, of which thermal power fell 6.2%, 　　Shenhua's decline is in fact consistent with the national level. Support for the purchase of overseas coal by the electricity companies earlier refers to power generation enterprises because of bearish future coal prices and unwilling to sign contract coal, but also to purchase overseas Low-cost coal, yinhuangqing large table support. He explained that because 75% of the energy consumption in the mainland comes from coal, but last year, coal consumption accounted for only about 4% of the world's total 40%,GDP, so if we want to double GDP in the future, we must make use of overseas resources, so it is a good time for overseas coal prices to be low at present; 　　Since the tariffs on imported coal are zero and the export tariffs are 10%, the mainland's import of coal from overseas is beneficial to the development of local economy. Talking about future mergers and acquisitions activities, he said that because of the low concentration of coal in the mainland, there is still a lot of room for development, plus overseas already have Australian projects. Therefore, in the absence of international experience and more difficult to control the risk, the company will not blindly expand overseas markets, nor will it consider co-operation or equity participation with other companies. 　　Exploration work and environmental assessment are currently being carried out in the Walt Mark Coalfield in Australia. On the coal price trend, Yinhuangqing said that Qinhuangdao 5,500 kcal of coal as an example, now from this year to 500 yuan per ton of low to 580 yuan level, is expected to be in the year 550 to 650 yuan range fluctuation. 　　Inner Mongolia to build billion tons of coal mining coal mines in coal prices failed to reach a consensus has been in the state of pull, even if the Sasac "shot" also failed to smooth the differences between the two sides. Yinhuangqing bluntly, government intervention in coal electricity between buyers and sellers is not a market economy in general practice, so the government's intervention does not help. 　　If the government wants to support an industry to help itself, it should not intervene in a cross-sectoral sector. In addition, yinhuangqing mentioned that the existing mining area in Shaanxi Elm Mining area and Inner Mongolia New Street, in which the Inner Mongolia new Street mining area was initially proved to have a geological reserve of 10 billion tons, is planning to build a 100 million-ton coal mining area in the local area, as well as the down-hearted in Shaanxi Elm Mining area. The company also plans to increase its capacity by 200 million tonnes in the next 5 years, with a total investment of $100 billion, if the current cost per ton is $500.