China's top power producer China Huaneng Group (CHNG) has acquired part of interest of a large Australian coal project.

CHNG on Thursday entered into the Monto Coal Joint Venture - Sale Agreement with Australia's Macarthur Coal Limited (Macarthur Coal) in Brisbane, capital city of the state of Queensland, where the signing ceremony was held.

Under the agreement, CHNG will acquire a 25.5-percent interest in the Monto Coal Project for a total consideration of 29.423 million Australian dollars (22 million US dollars), subject to the exercise of pre-emptive rights and satisfaction of other conditions (including obtaining applicable Australian, Queensland and People's Republic of China government regulatory approvals), CHNG said in a statement.

Macarthur Coal is a coal production and export company that went public in Australia in July 2001, with a current market capitalization in excess of 1.2 billion dollars (900 billion US dollars).

The Monto Coal Project is located in the southern part of the Bowen Basin with total coal resources estimated at over 500 million tons.

The mine development phase is contingent on the completion of a full scale feasibility study and on a development decision being made by the management committee of the Monto Coal Joint Venture.

The project is to be developed after undertaking an extensive exploration program, a test pit operation and a full feasibility study based on annual production of up to 10 million tons. Should the project proceed, CHNG would become a substantial consumer of coal produced from the Monto Project, according to the statement.

CHNG is planning to ship the coal to its newly built large coastal thermal power plants in China to supplement the fuel supply.

CHNG has an installed capacity of 40,990 MW. By the end of the first half of 2005, CHNG accounted for 9 percent of the total installed capacity and 10.8 percent of total power generation volume in China.

Source: Xinhua