Tremendous changes are coming in Chinese coal industry this year.
A heavy-duty lorry receives coal load at a yard in Huaibei, Anhui province. Prices of coal and metals have risen
this year, boosting profits and shares of listed companies in the sectors concerned. (CHINA DAILY)
China National Coal Group (also known as China Coal), the second largest coal miner in the country, are widely expected to be the first stated-owed enterprise (SOE) to merge coal mining assets from other multi-industry SOEs.
Actually, China Coal has been in the process of asset integration. In 2016, it acquired 30.31% stake of SDIC Xinji Energy Co., Ltd. for free, which changed its name to China Coal Xinji Energy Co., Ltd. in January 2017; a year later, China Coal got Poly Energies Holding Co., Ltd. from China Poly Group and renamed it as China Huali Energy Holding Co., Ltd.
The country's National Development & Reform Commission (NDRC) said on January 5 in a statement that by the end of 2020, China plans to form a number of mega-miners, each with annual coal production capacity of 100 million tonnes.
The NDRC statement also highlighted mergers and acquisitions (M&As) are encouraged between coal miners and electricity companies, coal-chemical enterprises as well as enterprises in the non-coal sectors, including iron and steel mills and transportation companies.
After the marriage of Shenhua Group and China Guodian Group, which created the world's largest power company China Energy Investment, China Coal, the only central SOE in the sector, are very likely to be the next to be regrouped.
"It's the time for China Coal to make some adjustments this year," said a market analyst. "The group may continue to absorb coal assets from non-coal SOEs, which may be the way to M&A in the sector."
(Writing by Alex Guo Editing by Tammy Yang)
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