The agreement between the two companies was one of the topics debated at a recent investment symposium in Johannesburg, involving corporate, government and industry delegates from Shaanxi and their counterparts in South Africa.
Deming says that a joint venture between AngloCoal and Shenhua to create a coal-mining operation would allow the companies to exploit several billion tons of coal in Shaanxi and potentially create a mine with a 50-year life. It is estimated that Shaanxi has 166,3-billion tons in coal reser-ves, in additon to oil reserves totalling 1,1 billion tons and natural-gas stocks of 585,8-billion m3.
The agreement comes after the announcement by Anglo American that it would invest $150-million in the initial public offering of Shenhua.
“China is an important player in the global coal sector and we have been actively pursuing a strategy of developing a China-based coal business,” said AngloCoal chairperson Tony Redman.
“AngloCoal is already involved in an exploration programme in the Shaanxi province, and the strategic investment in Shenhua strengthens AngloCoal’s China strategy,” said Redman.
“We are pleased to be cooperat- ing with Shenhua – it has long-standing experience in the region and we look forward to a mutually- beneficial strategic alliance with the group.” Last year, AngloCoal completed a joint-exploration agreement with the Shaanxi Coalfield Geology Bureau to investigate the potential of a coal lease in Shaanxi.
Tests showed that the lease had the potential for the foundation of a significant coal-mining operation.
The benefit of the investment in Shenhua is that it is the largest coal producer in China and the fifth-lar-gest in the world.