China Shenhua starts output at 20 mln T coal mine

SHANGHAI, March 26 (Reuters) - China Shenhua Energy Co Ltd (1088.HK: Quote, Profile, Research, Stock Buzz)(601088.SS: Quote, Profile, Research, Stock Buzz), the country's top coal exporter, has started production at its 20 million tonne-a-year Buertai coal mine in Inner Mongolia, an official from its parent Shenhua Group said on Wednesday.

Total investment in the mine was 4.5 billion yuan ($638.2 million), said the official, who declined to be identified.

He added that production had started on March 15.

The company said in its annual report earlier this month that a trial production run was scheduled at the mine in May, although the official Shanghai Securities News reported on Wednesday that a trial run had already taken place.

A spokesman at Shenhua Energy declined to comment or give details of the project. Shenhua Energy has said it expected its coal output to grow 12 percent, or 19 million tonnes, to 177 million tonnes in 2008. (For details, click [ID:HKG209438])

Spot coal prices in China hit a record high in early February, after the harshest winter weather in decades disrupted coal transportation and helped to trigger severe coal and power shortages.

Coal is the single largest source of energy in China, fuelling more than 80 percent of China's electric power generation. ($1=7.051 Yuan) (Reporting by Rujun Shen; Editing by Edmund Klamann)