CR Power aims to meet 40pc of its coal demand
China Resources Power Holdings aims to increase its self-sufficiency in coal to more than 40 per cent by 2012 after reporting a better than expected 125.5 per cent jump in first-half profit.
The firm planned to invest up to 10 billion yuan (HK$11.35 billion) over the next four years to boost the capacity of newly acquired coal mines in Shanxi province, chief executive Wang Shuaiting said.
CR Power, through 58 per cent-owned Shanxi China Resources Liansheng Energy Investment, just bought 17 coal mines in Luliang district in the coal-rich province and was looking to buy more, Mr Wang said.
But expanding the 17 mines' production capacity to more than 20 million tonnes a year by 2012 from only 3 million tonnes this year might cost a total of 8 billion to 10 billion yuan, including the acquisition cost, Mr Wang (right) said.
The power generation arm of state-backed conglomerate China Resources (Holdings), which started to invest directly in coal mining a few years ago to lock in long-term fuel supplies at competitive rates, will see its self-sufficiency rise to 40 to 50 per cent by 2012 from only 10 per cent this year, he said.
CR Power's coal requirements are an estimated 50 million tonnes this year, rising to 80 million tonnes by 2012, by which time total coal output is expected to reach 40 million tonnes.
In June, CR Power had attributable generating capacity of 13,690 megawatts (MW), which is expected to rise to 24,000 MW in 2011.
CR Power said yesterday first-half profit increased to HK$2.268 billion from HK$1.006 billion a year earlier, as higher power prices and lower coal costs more than offset the impact of weaker demand. Sales rose 15.2 per cent to HK$13.99 billion. An interim dividend of 6 HK cents was declared.
The earnings surge was due to two power tariff increases by the central government in July and August last year, which on average raised CR Power's tariff by 42 yuan per megawatt-hour (MWh).
Lower coal costs also contributed, accounting for about two-thirds of the producer's total operating costs. Its average unit fuel cost fell 3.5 per cent year on year to 202.80 yuan per MWh.
During the first six months of this year, the company's total net power generation fell 5.1 per cent to 46.6 million MWh as power demand in the world's third-biggest economy fell, reflecting global economic weakness.
Shares of CR Power surged 5.54 per cent to close at HK$19.82 yesterday.
