China's biggest coal producer, China Shenhua Group, and Peabody Energy have signed a memorandum of understanding to pursue business development opportunities of mutual interest, according to Peabody Energy here Thursday.

The agreement formalizes the parties' mutual interest in working together in coal and coal-related projects and initiatives, Peabody Energy said in a press release.

In coming months, the companies intend to identify specific projects for cooperation, including possible development of coal projects both in and outside of China and the exchange of best practices.

Peabody Energy is the world's largest private-sector coal company, with 2005 sales of 240 million tons of coal and 4.6 billion U.S. dollars in revenues. Its coal products fuel approximately 10 percent of all U.S. and 3 percent of worldwide electricity.

"This is a very positive first step in advancing a strategic alliance between the world's largest coal company and the leading coal-based energy company in China," said Peabody President and Chief Executive Officer Gregory H. Boyce.

Source: Xinhua