Chinese coal firm Dynamic Energy to boost capacity

HONG KONG, April 3 (Reuters) - Chinese coal producer Dynamic Energy Holdings Ltd (0578.HK: Quote, Profile, Research) plans to set aside 2 billion yuan ($285 million) to buy mines and more than quadruple its annual coal production capacity to 6 million tonnes by 2011.

Dynamic Energy, based in the central province of Henan, plans longer-term to boost its capacity to 10 million tonnes in five years, Chairman Bao Hongkai told reporters on Thursday.

The firm plans to boost its coal reserves to 100 million tonnes by 2011 and 200 million tonnes in five years, Bao added.

Chinese coal consumption has roared in past years alongside economic growth, propelling ex-mine prices for the hydrocarbon to record highs in 2008 and spurring a raft of capacity expansion plans at the likes of Shenhua (1088.HK: Quote, Profile, Research) and China Coal (1898.HK: Quote, Profile, Research).

In the first quarter alone, coal prices had risen about 30 percent to 470 yuan a tonne from the previous year, Bao said. Rising coal prices have squeezed coal-dependent electricity producers across Asia.

Dynamic, formerly a power generating firm known as Everbest Energy, had decided to pool its assets and resources in thermal coal mining instead. ($1=7.018 Yuan) (Reporting by Judy Hua; Editing by Anne Marie Roantree)