While other Chinese coal miners have been unable to paysalaries and the industry continues to grapple with increasing unemployment,China Shenhua Energy Co.Ltd. said it has no plans to lay off staff, even though total coalcapacity could fall by as much as 16% this year.
"Unlike other coal miners, we will not push ouremployees to the labor market," Vice Chairman Ling Wen told reporters at amedia briefing in Hong Kong on March 29, despite the company a 54% year-over-year drop in its2015 net profit to 17.74 billion Chinese yuan.
Ling added that the company will need to cut the number ofemployees in its coal division, but "will divert them to other subsidiariesof the company instead of making redundancies."
In contrast, China Coal Energy Co. Ltd. is looking to government subsidiesas part of massive layoffs and the northeast China-based Longmay Group hasreportedly beenunable to pay wages for its 200,000-strong workforce since late 2015.
Unlike other coal miners, China Shenhua is not significantlyaffected by the ongoing 500-million-tonne annual capacity cut across thecountry's sector, said the coal executive.
"The program will only affect coal mines that are notenvironmentally friendly, inefficient, unsafe or illegal. None of these applyto our mines," Ling said.
Meanwhile, President Han Jianguo said at the briefing thatstarting from this year, the Chinese central government may only allow domesticcoal mines to operate 276 days per year, down from the current 330 days.
"The government is considering revising therequirements of statutory working days for coal mines. If implemented, it wouldreduce China Shenhua's annual coal capacity by about 16%," Han said.
China Shenhua's annual capacity was about 330 million tonnesas of the end of 2015, and it is looking to produce 280 million tonnes of coalthis year, according to Han.
Amid weakening demand for coal in the domestic market, thecompany expects itsthermal coal exports to South Korea and Japan to increase to between 5 milliontonnes and 10 million tonnes, from 1.2 million tonnes in 2015.
While the company targets overseas markets, Ling said thatthe company will not seek capacity expansions abroad and will focus on itsexisting assets over the next few years.
"We will remain cautious on acquiring coal assetsabroad. There are some acquisition opportunities emerging in the global market,but we are not planning any substantial acquisition activities," Ling said.
Han noted that the company would only consider an investmentin overseas markets if the rate of return on investment is estimated to beabove 10%.
As of March 29, US$1was equivalent to 6.51 Chinese yuan.