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BEIJING (AFX) - Sept 20
US-based Peabody Energy (NYSE:BTU) said it is looking to invest in Chinese coal assets via joint ventures. He said it is looking for investment opportunities. "We are having discussions with several companies. But we are especially targeting a larger mine," he said without giving more details. "In the next 5-10 years we think Peabody will have a meaningful presence in China," Navarre added. He said Peabody, the largest private coal company in the world, was looking at minority stakes ranging from 10 pct to 49 pct in existing greenfield projects. "A joint venture seems the best way at this point to enter the market. We are not interested in anything under 10 pct," he said. "We will consider a 45 pct stake in a smaller mine, but we are not opposed to a 20-25 pct stake in a multirisk project," he added. He said it was too early at this point to say how much Peabody was looking at investing in China. Navarre said China's huge demand for coal and cleaner energy offered Peabody many investment opportunities including coal conversion. He estimates that in the next 15-20 years 90 pct of global coal demand will come from China, India and the US. China relies on coal for around 80 pct of its power generation and though the government has said it will diversify its energy mix, coal is expected to remain the main energy source. Coal output in the first half increased 9.7 pct year-on-year to 940 mln tons and investment in the coal mining and coal washing industry surged 81.7 pct in the same period. Peabody exports coal to China via three of its coal mines in Australia and Navarre said the company will focus in the short term on coal trade and commercial presence in China. He said he sees coal imports rising in the next few years as China shuts down its smaller coal mines and improves security. China coal imports jumped 56.1 pct year-on-year to 12.09 mln tons in the first six months. On the safety front, Navarre said his company boasts the safest coal mine working environment in the world and said Peabody would not compromise on safety in China. In the first half of the year, official statistics show China recorded 2,700 mining fatalities. Navarre also said Peabody was interested in the Mongolian market and confirmed his company has been talking to Canada's Ivanhoe Mines about investing in Mongolia. Ivanhoe Mines are the biggest coal company working in Mongolia. In the past two years Peabody has invested two bln usd into coal projects. It has proven coal reserves of 9.3 bln tons of coal. In 2004 sales reached 227 mln tons generating revenues of 3.6 bln usd. virginie.mangin@xinhuafinance.com vm/dg/dk News Provided By |
