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Author/Source: http://coal.in-en.com/ Date: 2009-4-1 -------------------------------------------------------------------------------- Datang International Power Generation Co., Ltd. said on Tuesday that China’s five major power generation groups have yet to sign this year’s coal contracts with coal suppliers; prices for the coal under these contracts are expected to remain at the same level as last year if power companies are to avoid losses. Due to the significantly high coal prices last year, China’s power generation companies suffered losses across the industry. Among them, Datang Group, one of China’s five major power groups, incurred losses of 6.345 billion yuan last year, while its listed subsidiary, Datang Guodian, saw its net profit drop by nearly 79% to 760 million yuan for the whole of last year. “Our view is that the price of coal under the contracts should not be higher than the price agreed upon at the beginning of last year,” said Zhai Ruoyu, chairman of Datang Guodian. Regarding this year’s coal procurement contracts, “so far, the five major power generation groups have not reached an agreement with coal suppliers,” he added. “The five major power generation groups hope that the price of coal under this year’s contracts will be 50 yuan per ton lower than it was at the beginning of last year, while coal suppliers want an increase of 80 yuan per ton; there is thus a difference of 130 yuan between the two sides’ demands regarding the coal price,” he explained. Ling Wen, executive director and president of China Shenhua Energy, China’s largest coal company, said on Monday that the company has signed coal contracts that will help it meet its sales targets for this year, and he is satisfied with the prices specified in those contracts, though he did not reveal the exact percentage change in those prices. He also mentioned that a five-year strategic cooperation agreement has been signed with the Chinese conglomerate China Resources Group, under which 85 million tons of coal will be supplied to that company. However, Zhai Ruoyu said that, as far as he knows, the coal suppliers have only signed strategic cooperation agreements with some power companies at present, and these are agreements that specify quantities but not prices. He hopes that contracts can be signed with coal suppliers by April, as negotiations on related issues are underway between the two sides.