China Shenhua Energy, the world's second largest coal miner, has announced that it plans to invest Yuan 270B ($39.7B) over the next four years to massively expand its coal production capacity and its port and rail capacity.
Under the expansion programme, Shenhua will double its annual coal production to 400 mt in order to meet China's growing demand for coal. By the time the investment plan is complete, the company will have more than 12% of the domestic market say analysts.
Company chairman Zhang Xiwu said that China Shenhua Energy is also planning to expand its shipping division with a possible third joint venture with a shipping company.
The two existing ventures comprise Zhuhai New Century Shipping, a JV with China Shipping Development, which operates panamax, handysize and 10,000 dwt bulk carriers, and Tianjin Yuanhua Shipping, a JV with China Ocean Shipping.
China Shenhua Energy owns berths at Tianjin and Huanghua. Plans to expand facilities at Huanghua in Hebei province have already been approved. Shenhua will build a 310m-long dock and associated coal handling facilities, capable of handling around 13 mtpa.
In total, the company plans to increase port handling capacity by 77% by 2014 and is also looking at increasing its rail capacity by 50%. It currently owns five railways dedicated to coal shipments.
