China Coal Energy Co., the nation's second-biggest producer of the commodity, is seeking to raise 150 billion yuan ($22.9 billion) in funds to finance projects through 2015, the company's chief financial officer said.
The coal producer will raise funds through bonds and loans, Weng Qing'an told reporters in Hong Kong today. The proposal to sell as much as 70 billion yuan of medium-term notes and commercial paper through 2013 is part of the company's fund- raising plan for the next five years, Weng said.
China will rely on coal to meet more than half of its energy needs by 2015 even as the government increases the use of cleaner-burning fuels, data from the National Energy Administration show. China Coal will focus on coal exploration in the next five years while developing its coal-to-chemicals and power generation businesses to diversify income sources, Board Secretary Zhou Dongzhou told reporters.
"Energy demand will still expand rapidly over the next 10 years and coal will still play an important role," Dai Yande, deputy director-general of the Energy Research Institute under the National Development and Reform Commission, said at a conference in Beijing today.
The country's largest coal producer after China Shenhua Energy Co. aims to produce at least 200 million metric tons a year of coal by 2015, Zhou said. Output reached 122.5 million tons last year, the company's 2010 earnings statement shows.
Operating Costs
The shares have fallen 9 percent in the past 12 months in Hong Kong trading, compared with the 9.1 percent gain in the benchmark Hang Seng index. China Coal dropped 1.9 percent to close at HK$10.54 today.
The unit of China National Coal Group Corp. reported on March 22 annual profit that missed analyst estimates after operating costs jumped 38 percent.
"A significant increase in low-margin coal trading transactions, expanded operations and higher raw-material prices boosted operational costs," China Coal said.
Coal exploration and production accounted for 79 percent of China Coal's revenue last year, while coking operations contributed 7 percent. Domestic sales accounted for 98 percent of the company's total revenue.
Capital spending will rise 72.8 percent to 34.2 billion yuan this year, Zhou said today.
