China Shenhua gets nod for Indonesia coal project

Tue Mar 4, 2008 5:37am EST

SHANGHAI, March 4 (Reuters) - Guohua Electric Power Corp, a subsidiary of China Shenhua Energy (1088.HK: Quote, Profile, Research) (601088.SS: Quote, Profile, Research), has received approval from Chinese regulators to develop a coal and power generating project in South Sumatra in Indonesia, a government Web site said.

The project will include a coal mine with annual output of 1.5 million tonnes and two 150 megawatt generators which are expected to start generating power in 2010, the State-owned Assets Supervision and Administration Commission said on its Web site (www.sasac.gov.cn).

This is the first overseas project of China Shenhua Energy, the country's top coal producer and exporter, said the Web site.

Shenhua did not give an investment amount or other details of the project.

China is expected to become a net coal importer this year, due to the country's soaring power demand and supply uncertainties.

Beijing has encouraged Chinese firms to go overseas to seek mining resources to supply its rapidly developing economy.

Supply bottlenecks in Australia and South Africa and a halt in Chinese coal exports helped to push benchmark coal prices at Australia's Newcastle port to record high of $150 a tonne in early February, before they eased to $132.05 as of Monday.

(Reporting by Rujun Shen; Editing by Edmund Klamann)