China Coal sees prices up 10 pct in 2008 -paper

HONG KONG, Dec 3 (Reuters) - China Coal Energy Co (1898.HK), the country's number two coal producer, expects domestic contract coal prices to rise at least 10 percent next year due to higher mine safety and environment costs, a newspaper reported.

Quoting China Coal's secretary Zhou Dongzhou, the South China Morning Post report on Monday also said the firm planned to buy one of five Shanxi mines restructured by its parent China National Coal Corp. The mine, just completed, had an annual capacity of 3 million tonnes.

Zhou said China Coal was on track to meet its 2007 production target of 79 million tonnes. It sold 68 million tonnes in the first nine months of this year.

Last month, sources said China Coal had hired a Morgan Stanley (MS.N) joint venture to handle its roughly $4.3 billion Shanghai listing to be launched this month. (For details please click on [nSHA151425])

(Reporting by Nao Nakanishi, editing by Dominic Whiting)