BIZCHINA / Top Biz News
ROK firm to set up coal joint venture
By Wan Zhihong (China Daily)
Updated: 2006-12-19 09:31
Korea Electric Power Corp (KEPCO) has agreed with Deutsche Bank AG and
Shanxi International Electricity Group to establish a 10 billion yuan
(US$1.28 billion) joint venture to develop coal mines in China.
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KEPCO will cover 34 per cent of the investment, while the Chinese company
and Deutsche Bank will account for 47 per cent and 19 per cent
respectively, said South Korean media reports.
The venture will develop nine coal mines in North China's Shanxi Province
over the next 50 years, according to media reports.
It also plans to buy 24 power plants in China, which will have a combined
capacity of 9,330 megawatts (MW).
KEPCO is South Korea's major power producer, supplying more than 95 per
cent of the country's electricity. The company refused to comment on the
deal when contacted yesterday.
The Seoul-based power company formally entered the Chinese market in
2004, with the construction of two power plants in Central China's Henan
Province.
The two coal-fired power plants were each designed to have an installed
capacity of 50 MW, involving a total investment of US$71 million.
The South Korean company signed an agreement in 2004 with its Chinese
partners to construct two more coal-fired power plants in Henan, each
with a designed installed capacity of 600 MW.
Analysts said that the deal would help the Chinese company to increase
its technological level and management skills.
"Shanxi Province is abundant in coal resources and KEPCO boasts advanced
technology. The deal is an example of win-win co-operation," said Han
Xiaoping, an energy industry analyst at the China5e.com website.
China is the largest coal producer in the world, and Shanxi's coal output
accounts for about one-third of the nation's total.
Coal-fired power plants now account for over 70 per cent of the nation's
total electricity output, with the authorities encouraging them to use
more advanced technology in order to save energy.
China Huaneng Group, the nation's biggest electricity producer, launched
the nation's first 1,000 MW ultra-supercritical coal-fired generating
units last month, with an investment of 9.6 billion yuan (US$1.22
billion).
According to the National Development and Reform Commission, China's coal
output hit 1.67 billion tons in the first 10 months of this year, up 12.2
per cent year-on-year.
The coal industry saw a profit of 52.3 billion yuan (US$6.54 billion)
during the January-October period, an increase of 17.6 per cent
year-on-year .
China Coal Energy Co, China's leading coal mine operator, hopes to raise
up to US$1.7 billion after its shares are listed in Hong Kong today. It
is the third mainland coal group to list in Hong Kong after Yanzhou Coal
Mining Co and Shenhua Energy Co.
(For more biz stories, please visit Industry Updates)
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