US energy companies seek partnerships with nation's coal firms

Updated: 2011-10-28 08:04

By Du Juan (China Daily)

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BEIJING - US-based companies are looking for opportunities to build cooperative relationships with the Chinese mining industry by providing machinery, safety equipment and clean coal technology, aiming to open the market further.

A delegation of US-based energy companies, including Peabody Energy Corp, Kress Corp, Jupiter Oxygen Corp and Caterpillar Global Mining Greater China and Korea, a division of Caterpillar Inc, led by US Commerce Department officials, came to China in late October to seek partnerships with Chinese businesses.

"US companies on this trade mission represent some of the latest and most innovative technologies in the coal mining sector," said Suresh Kumar, assistant commerce secretary for trade promotion and director-general of the US Foreign Commercial Service, at the International Coal Summit 2011 on Thursday in Beijing.

"The best selling is not only about the products" but also the needs of customers, said Kumar. "Safety equipment is what the Chinese mining industry needs, and the US has the best safety record in the sector."

He said that the US companies are also interested in offering services to increase mining-sector production efficiency and clean coal technology.

According to the China National Coal Association (CNCA), the domestic market for coal machinery will be worth about $16 billion in 2011, growing to $22 billion by 2013.

China's technology for mining machinery and safety equipment lags behind that available in developed countries, said CNCA President Wang Xianzheng.

"We still depend on importing large key machinery to develop the industry", he said.

"How to develop the Chinese coal mining industry on a safe, efficient and sustainable path is our key target," Wang said. "We need to continue working hard on research into high-technology equipment and mining technology to improve the industry's capacity for independent innovation", he added.

He said that during the 12th Five-Year Plan (2011-2015), China intends to rationalize the coal industry to create fewer but larger mines.

China's fast economic growth has meant a large increase in its energy demand. The nation's 598 coal-fired power plants supply 65 percent of China's total energy consumption. Plans for 80 new coal-fired plants will offer opportunities for US-based companies that supply advanced technology and services. However, some experts expressed doubt about the scale of the Chinese market for US mining safety equipment.

"It will be difficult for the US companies to sell their safety equipment to Chinese coal mines because of the high prices," said Huang Shengchu, president of the China Coal Information Institute and National Institute for Occupational Safety. Huang added that domestic technology for safety equipment is improving. Also, the need for safety equipment isn't obvious to Chinese companies, which makes them reluctant to invest in these products.

"Even though the government has policies that require mines to install safety equipment such as life shelters, the implementation (of these policies) will take time," he said.

China Daily