China's top coal producer Shenhua Group is in talks with Mongolia for buying the majority shares of the one-billion-ton coal mine in the nation, Shanghai Securities reported Tuesday.

 

This will be China's second but largest trans-border transaction of coal mines if the negotiation concludes smoothly.

 

Some global coal giants also expressed strong desire of cooperation in the project, but Shenhua Group may be the largest shareholder after some concession, said the newspaper.

 

Shenhua Group ranks first in the world in coal reserve after frequent mergers and acquisition in the past two years. The Mongolian coal mine attracted Shenhua mainly with its coking coal reserve and the low coal price in Mongolia.

 

Coking coal, accounting for about 26 percent of China's total coal reserve, is rare resource both in China and the world, the newspaper quoted President of Shenhua Group Zhang Xiwu as saying.

 

Currently, only a unilateral railway connects a North China city with Ulan Bator. The coal mine is about 500 kilometers away from Ulan Bator, and the only efficient way for Shenhua to transport the coal from the mine is to build a new China-Mongolia railway, Zhang said.

 

There exists the possibility for the two nations to jointly construct the railway, the newspaper quoted an analyst in the consulting field as saying.

 

(Xinhua News Agency April 13, 2006)