China Coal Energy Co., the nation’s second-largest producer of the fuel, will invest 17 billion yuan ($2.8 billion) to develop a coal mine in northern China as power demand increases in the world’s second-biggest economy.
Targeted production from the mine in Shaanxi province is 15 million metric tons a year, the Beijing-based company said in a statement to the Hong Kong Stock Exchange yesterday. Development of the mine, which has recoverable reserves of 3.28 billion tons, will take more than five years, the company said.
The project will produce coal “for civil, gasification and power use,” according to the statement. Part of the funds will come from bank loans, according to the statement, which didn’t provide further information.
China is increasing coal output to fuel power plants despite the thick smog from existing generators that frequently blankets cities such as Beijing and Shanghai. China consumes nearly half the world’s coal, or almost as much as all other countries combined, according to the U.S. Energy Information Administration.
China Coal Energy rose 2.2 percent to close at HK$4.25 in Hong Kong yesterday, before the investment was announced. That compares with a 0.3 percent gain in the benchmark Hang Seng Index.