Friday, March 28, 2008

China Datang Power invests $484 mln in coal mine

China's Datang Power <><> said on Thursday it would invest up to 3.4 billion yuan ($484 million) to buy a 51 percent stake in a venture that will develop a large coal mine in Inner Mongolia.

The major electricity producer also said its net profit in 2007 rose 17 percent to 3.41 billion yuan due to increased power generation and higher power prices. Revenues climbed 32 percent to 32.83 billion yuan.

Profit growth lagged the rise in revenue partly because rising coal prices have squeezed the margins of Chinese power generating companies, since the government controls power prices and is reluctant to raise them for fear of fuelling inflation.

The coal project in the Chinese region of Inner Mongolia, which still needs government approval, will produce 60 million tonnes of coal a year, the company said without specifying when the project might start production.

Datang Power also said it would invest 2.9 billion yuan and 3.3 billion yuan in two projects to turn coal into gas in Inner Mongolia and northern China's Liaoning province. (Reporting by Rujun Shen; editing by Ken Wills)

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