China Shenhua Energy plans to spend 270 billion yuan (HK$307 billion) to expand production and coal storage capacity over the next four years as it enhances national energy security.
The listed unit of Shenhua Group, the nation's top coal producer, will double its coal output capacity in five years, build strategic coal storage facilities in central, southern and eastern China, expand coal transportation facilities and boost power generation capacity, said chairman Zhang Xiwu.
Company secretary Huang Qiqing earlier said 148 billion yuan has been budgeted to double coal output capacity to 400 million tonnes, raise its ports' handling capacity by 77 per cent, railway capacity by half and power generation capacity by a third.
Zhang did not say what the remaining 122 billion yuan will be spent on, but analysts said it might fund the acquisition of its parent's project in Inner Mongolia that turns coal into liquid fuel.
He said the coal storage would help expand sales and hedge the risk of transportation bottlenecks caused by unusual events, such as the major earthquake in Sichuan province and severe winter storms in south China that clogged the rail system last year.
Zhang said locations of the storage facilities were still being deliberated, adding the capacity would only be 30 million tonnes as coal could only be kept for up to three months to avoid quality deterioration.
