By staff reporter He Shan

China Datang Corporation, China's second-largest electricity generator, is considering buying coal from Australia and Southeastern Asian countries, especially Vietnam, Chairman Zhai Ruoyu told China.org.cn on the sidelines of the annual session of the China People's Political Consultative Conference.

The move comes after the company failed to reach a long-term contract with domestic suppliers last December.

"Negotiations are still in progress," Zhai said yesterday in an interview with China.org.cn in Beijing. "The current downward spiral of the coal price has given us the upper hand in negotiating a reasonable price."

Since the failure to reach a deal with suppliers at home, the company has been considering buying coal on the spot market. And it is reported that Datang is in talk with Australian suppliers about buying around 1 million metric tons of coals.

"Even if you factor in the shipping costs, it is cheaper to buy overseas coal," he said.

But the bulk of coal Datang buys is still from domestic market. Datang's current coal stockpile is enough for about 20 days of consumption, he said.

The company plans to invest more in hydro power and other energy sources such as nuclear power. He said plans are being drawn up but are subject to approval by the National Development and Reform Commission, China's top economic policy making body.

As the global financial crisis deepens, opportunities are opening up. According to Zhai, Datang is planning mergers and acquisitions at home and abroad.

"If a company has good performance but in current financial difficulties, Datang will consider the business possibilities," he said.

Datang also plans to explore the African market, as the domestic demand for electricity has waned since the fourth quarter of last year.

When asked about Premier Wen's report made on Thursday morning, he described it as a down-to-earth report. The thing he was most concerned about was the reference to fixing the pricing mechanism for power generators.

Datang reported a loss of 6.34 billion yuan (US$0.9 billion) in 2008 because of rising coal costs and state caps on electricity tariffs, and is unlikely to return to profitability in the first quarter of this year.

But the president is confident that electricity consumption will begin to pick up in the second quarter or at the latest in the second half of the year.

(China.org.cn March 6, 2009)