China's second largest coal-mining company, Yangkuang Group, said it has entered talks to take a controlling stake to run an Australian coal mine run by Xstrata Plc. The company's vice-chairman, Mo Liqi, said it was negotiating for a 51 per cent stake in the Ulan mine, some 300km northwest of Sydney. The mine produces about 5m tonnes of coal a year and would help Yankuang achieve its goal of more than doubling coal output to 100m tonnes by 2005.
Yankuang is looking at investment opportunities overseas since the reserves at home are often more expensive to mine. The industry in China is going through a period of con solidation as the government strives to close thousands of illegal and dangerous mines and incorporate others into larger groups such as Yankuang and Shenhua.