UPDATE1-Russia's EN+ aims to double coal reserves,annual output

Published 09/15/2010, 12:26 AM
Updated 09/15/2010, 12:28 AM

* EN+ aims to double coal reserves to 2 billion T in 3-5 yrs

* To double coal output to 25-30 million T over same period

* In talks with Chinese power, mining firms on investments

* Exploring JVs with China companies to export electricity (Adds quotes, details)

By Alison Leung and Kennix Chim

HONG KONG, Sept 15 (Reuters) - Russia's En+ Group aims to double its thermal coal reserves in 3-5 years to 2 billion tonnes and double annual coal output to 25-30 million tonnes per year within the same timeframe, the company's head of strategy said on Wednesday.

The company was also in talks with Chinese power and mining companies about possible investments in coal projects to supply thermal coal to Chinese power plants and was looking to form joint ventures with Chinese power companies, said Dmitry Yudin, head of strategy of En+ Group, on the sidelines of the Russia & CIS Investment Summit in Hong Kong.

The goal of the joint ventures would be to export electricity from Russia to China.

"The company is interested in developing coal projects because of strong demand from China," said Yudin.

Coal demand from heavy industry in China has climbed in recent years as the country's economy surges ahead, with coal giant China Shenhua Energy Co Ltd posting a record second-quarter profit in August on higher sales. Russian coal supplies to China skyrocketed last year to 12 million tonnes from 0.76 million tonnes in 2008.

En+ Group, owned by Russian billionaire Oleg Deripaska, employs more than 100,000 people and is involved in mining, metals and energy businesses.

The group consolidated its energy assets last year into EuroSibEnergo Plc, creating Russia's second-largest electricity producer.

With a total capacity of 19.5 gigawatts, EuroSibEnergo generated more than 8 percent of the country's electricity and produced 82.8 billion kilowatt hour of electricity last year.

EuroSibEnergo owns a series of power stations in Siberia that power the smelters of United Company RUSAL Plc.

In addition to EuroSibEnergo, EN+ is the parent of ferromolybdenum maker Strikeforce Mining and Resources Ltd (SMR) and a major shareholder of RUSAL, the world's largest alumina and aluminium producer. (Additional reporting by Joseph Chaney; Editing by Chris Lewis and Don Durfee)

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