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Coal output slows after power demand weakens

CHINA Coal Energy Co, the nation's second-biggest producer by sales, increased output at a slower pace in January because of falling demand from power producers.

Coal output rose 2.5 percent to 7.8 million metric tons, the Beijing-based company said yesterday. Last year, production rose 11 percent. Sales fell 13 percent to 5.16 million tons last month as exports declined, Bloomberg News said.

China's power generation, 80 percent of which is fueled by coal, fell for a third month in December because of the economic slowdown.

Donovan Huang, a Shanghai-based analyst at Nomura Securities Ltd, said: "Power demand is really weak at the moment. Coal-fired electricity generation may have fallen by more than 10 percent in January."

The Chinese New Year holiday also curbed growth, he said.

The company's domestic sales climbed 13 percent to 4.93 million tons last month and exports fell to 230,000 tons from 1.59 million tons a year earlier, it said.

Coal exports may decline this year given the smaller quota issued, Huang said. China has approved a first 2009 coal export quota of 26 million tons, compared to 31.8 million tons for 2008's first batch of licenses.


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