Independent Chinese power company Huaneng Power International has signed a long-term coal supply agreement with Pingdingshan Coal Limited Liability Company. The deal, signed on June 3, 2005, covers a term stretching from 2005 to 2009.
Pingdingshan Coal Group will supply Huaneng with thermal coal amounting to 0.5 million tons, 2 million tons and 2 million tons, respectively for each of three years from 2005 to 2007. After 2007, the supply will increase so as to meet the need of the Huaneng’s power plants at that time.
As part of the purchase deal, Huaneng and Pingdingshan have agreed in advance on the annual coal prices for the term and the relevant price adjustment mechanisms to be used.
Huaneng Power develops, constructs, operates and manages large power plants throughout China and has a total generation capacity of 21,418 megawatts. The company wholly owns 16 operating power plants, and has controlling interests in ten operating power companies and minority interests in four operating power companies.