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Coal firm sees more profit with output up

CHINA National Coal Group said yesterday that it expects to almost double its profit in five years with an output twice that of last year's.

The company plans to lift its profit to 20 billion yuan (US$2.9 billion) within five years, compared with 11.3 billion yuan in 2008, the Beijing-based coal miner said in a statement posted on the Website of the State-owned Assets Supervision and Administration Commission yesterday.

Coal production may almost double to 200 million metric tons, the country's second-biggest producer of the fuel said. It said that sales are set to reach 150 billion yuan in five years, up from 71.9 billion yuan last year.

Analysts agreed that the miner may gain from higher output as new coal mines start this year and the shutdown of small mines will help lift its market share.

Essence Securities Co said output may swell by 10 million tons this year with two new mines starting operations.

"Profit is seen to rise with raised output, and a stable coal supply to power groups such as China Huaneng Group will help the firm," said Li Jing, an analyst at China Minzu Securities Co.

Lower coal prices due to falling demand and higher production costs resulting from a tax revamp will pose rising pressure on coal producers this year, the company said. The current economic situation has also dampened coal demand. The rise in industrial output began to plunge in October and demand for coal to generate electricity fell sharply. Coal exports last year also dropped 17.32 percent to 15.66 million tons.


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