China Shenhua Energy pumps $40bn into coal investment in race to the top

CHINA Shenhua Energy, the world&rsquo;s most valuable coal producer, plans to invest $39.5bn (&pound;24.4bn) through 2013 to expand production capacity as it races to supply the world&rsquo;s top coal consumer.<br /><br />Shenhua, which also has power, rail and port divisions, will earmark about 30-50 per cent of the total investment for capital expenditure, Chairman Zhang Xiwu said.<br /><br />&ldquo;In line with national strategy, building coal reservation bases not only secures national energy safety, but facilitates our integrated operations,&rdquo; Zhang said<br /><br />BNP Paribas analyst Kathryn Ding said: &ldquo;This investment should help the company fund its plan to more than double its annual capacity to 500m tonnes in five years.&rdquo;<br /><br />Ding expects the money will be used to buy assets from Shenhua&rsquo;s parent, fund the development of two new 100m tonne-per-year coal bases and for overseas acquisitions<br /><br />Shenhua is one of 10 bidders keen for a stake in what is known as the world&rsquo;s biggest untapped coking coal deposit, with a coal reserve of 6.5bn tonnes in the Gobi desert.