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China Coal Energy: Significant cost advantages in the coal chemical industry. HC360 Chemical News: In order to be listed on the Shanghai Stock Exchange on February 1, China Coal Energy Co., Ltd. (**Exchange Code: 1898, hereinafter referred to as China Coal Energy) held an online roadshow on the afternoon of January 24. President Jing Tianliang said that given that international oil prices are currently near $90 per barrel and show a tendency to rise further, the coal chemical industry will enjoy cost advantages for a long time to come. According to Tian Liang, compared to the petrochemical industry, the coal chemical industry has a clear cost advantage. From the perspective of alternative energy, coal-based alcohol ether fuels have a cost advantage when oil prices are at least 35 dollars per barrel ； Coal-based olefins have a cost advantage when oil prices are at least $40 per barrel. He believes that, with the surge in international oil prices, the cost advantage of the coal chemical industry will remain. China Coal Energy is China’s second-largest coal company; the number of A shares to be issued in this offering is expected not to exceed 1.525 billion shares, accounting for 11.51% of the total share capital after the issuance. Following the preliminary price inquiries conducted from January 21st to 23rd, the issue price per share for A-shares was finally set at between 16 yuan and 16.83 yuan, with the amount of funds raised expected to exceed 20 billion yuan. China Coal Energy stated that the funds raised will be primarily invested in two projects: one is the Ordos coal mine with an annual production capacity of 25 million tons, as well as a methanol plant with an annual output of 4.2 million tons and a dimethyl ether plant with an annual output of 3 million tons, along with related infrastructure ； Secondly, the coal mine in Heilongjiang with an annual production capacity of 10 million tons, the methanol plant with an annual capacity of 1.8 million tons, and the olefin plant with an annual capacity of 600,000 tons, along with their supporting facilities, will all be completed and put into operation by 2011. According to Tianliang, the two projects cost a total of 21.187 billion yuan; any remaining funds will be used to supplement the company’s working capital for general purposes or to acquire assets related to its core business. When netizens asked why the coal-electricity linkage mechanism had not been activated yet, Jing Tianliang said that on January 9, 2008, an executive meeting of the State Council decided that prices of refined oil, natural gas, and electricity should not be adjusted in the near future. Moreover, a new series of measures to stabilize prices have been introduced recently, so it is unlikely that the coal-electricity linkage mechanism will be activated in the short term. However, he believes that under the policy approach of marketizing coal prices, a mechanism linking coal and electricity production still exists. Coal prices will continue to rise steadily, and the resistance of power companies to rising coal prices can ultimately be alleviated through mechanisms such as the coal-power linkage system. According to Tian Liang, the coal supply and demand coordination meeting for 2008 has already concluded, and an increase in coal prices is now a certainty. Contract prices for key thermal coal have seen an overall increase, rising by about 30–40 yuan per ton, or around 10%. He believes that rising coal prices are an inevitable outcome of demand-driven and cost-push factors. When talking about expanding production capacity, Jing Tianliang said that the company will take various measures, such as upgrading existing coal mines, increasing investment in open-pit mining equipment, and building new mines, to actively expand production capacity and ensure an annual increase in raw coal output of around 15 million tons. In addition, Jing Tianliang also explained the company’s future energy strategy. He said that China Coal Energy will seek cooperation with large domestic and international strategic investors in the energy, chemical, power, and other sectors to develop coal resources. In the future, efforts will focus on obtaining exploration and mining rights for the Hujilete coal field in Ordos, Inner Mongolia, and the Yongqing coal field in Jixi; the reserves in Hujilete in Ordos amount to 4.4 billion tons, while those in Yongqing in Heilongjiang amount to 1.4 billion tons.