The world's largest private sector coal miner Peabody Energy has entered into an agreement with China's Shenhua Group to create Sino-Pacific Coal Trading (SPCT). SPCT will be a Singapore-based 50/50 joint venture (JV) company.
Under the terms of the agreement, SPCT will supply thermal coal from Peabody's global production and coal trading platform to meet Shenhua's growing coal import demand.
Peabody Energy Asia and Trading president Christopher J Hagedorn said that the JV marks a significant milestone in Peabody's Asian growth strategy.
"Shenhua is one of the world's largest importers of thermal coal and this important partnership will give Peabody a priority position to supply Shenhua's growing import needs with coal from Peabody's expanding global platform," Hagedorn said.
The company expects to begin operations this year, following a regulatory review.
"Annual world coal demand is expected to grow by 1.2 billion tonnes in the next five years, with more than 80% of projected global demand growth in China and India," Hagedorn added.
China-based Shenhua Group is large-scale energy company and coal distributor, which also covers electric power, railway, port, shipping, coal-to-liquids and coal-to-chemicals, and integrates production, transportation and sales.
Peabody supplies to metallurgical and thermal coal customers in more than 25 countries across six continents.