Datang International Power Generation aims to become entirely self-sufficient in coal supply by 2010 to shield itself from the impact of spiralling coal prices and a power tariff freeze. Chairman Zhai Ruoyu said the largest electricity producer for the Beijing-Tianjin-Datang region aimed to raise annual capacity to 140 million tonnes of coal by 2014, up from 50 million tonnes for 2010 and 10 million tonnes this year. This year's consumption is estimated to be 70 million tonnes. 'We are building Datang International into an integrated energy company that can withstand volatile market conditions,' Mr Zhai said. Before he unveiled this coal strategy, analysts had been lowering their forecasts on the company's net profit for this year, taking Beijing's resolve to clamp down on a 12-year high rate of inflation to mean a tariff freeze for most, if not all of the year. The last tariff increase was in July 2006. According to Thomson Financial, the average profit forecast of 17 brokerage analysts for this year has been cut 7.77 per cent to 3.57 billion yuan (HK$3.96 billion) in the past month. Merrill Lynch analysts Joseph Jacobelli and Vincent Chow cut their forecast 35 per cent to 2.86 billion yuan earlier this month, citing flat plant utilisation and a 14.2 per cent rise in coal cost per unit of output. So far, Datang has secured 66 per cent of its coal demand for this year by signing contracts to accept an average price increase of 15 per cent. 'Datang is desperate to show it has other income streams from non-coal-fired power projects,' said an analyst at a United States brokerage. Vice-chairman Zhang Yi said the company had amassed more than 22 billion tonnes of coal reserves from seven projects in Shanxi and Hebei province and Inner Mongolia Autonomous Region, although he did not specify how much of this was economically recoverable. Contracts have yet to be signed on three of the projects, including the biggest - the 60 million tonne-a-year Wujianfang mine in the Inner Mongolia Autonomous Region. Meanwhile, Mr Zhang said the company hoped to start producing natural gas from coal in Kesheketeng Qi in Inner Mongolia by the end of next year, taking a volume of 4 billion cubic metres (bcm) by 2012. A 440km pipeline will send the gas to Beijing, where distributor Beijing Gas Group, in which Datang holds 51 per cent, is a prospective customer. A separate coal-to-gas project in Fuxi, Liaoning province, in which Datang has a 60 per cent stake, will also have 4 bcm of annual capacity for the Dalian market. Datang will need to invest 20.86 billion yuan in the projects, 70 per cent of which will be financed by bank loans.