The Shanxi Coal-Steel Energy Development Company began operation recently in Taiyuan, the capital city of north China's Shanxi Province, a senior official with the Shanxi Coking Coal Group confirmed Saturday.
The move is believed to be a significant measure for the province, which is located on China's major coal belt, to cope with the global economic downturn through deepening cooperation between coal and steel industries.
According to Bai Peizhong, chairman of the Shanxi Coking Coal Group, the new company has a registered capital of 500 million yuan (73.3 million U.S. dollars), with the coking coal supplier taking 60 percent of the stake and Taigang Group holding the remaining 40 percent.
The new energy company will engage in coal mining, dressing and marketing. It will ensure coal supplies for Taigang Group and share profits from coal mining with the steel maker, Bai said.
As China's largest coking firm, the Shanxi Coking Coal Group turns out 10 percent of the country's total product and supplies more than 20 percent of such materials needed by 18 big steel makers nationwide.
Taigang Group is a world leading stainless steel manufacturer in terms of production capacity and technologies.
Industry observers said the establishment of the new company would be conducive to sharpening competitive edge of both coal and steel producers.
(Xinhua News Agency May 30, 2009)