UPDATE 2-China's Shenhua Energy eyes $125/tonne for coal sales

(Adds comment on iron ore, joint ventures)

By Daryl Loo

SINGAPORE, April 8 (Reuters) - China Shenhua Energy (1088.HK: Quote, Profile, Research, Stock Buzz) (601088.SS: Quote, Profile, Research, Stock Buzz), the world's biggest coal producer by market value, said on Tuesday it plans to base its 2008 export prices against the $125 a tonne set by Australia's Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz).

Top thermal coal exporter Xstrata Plc won a deal with Japan's Chubu Electric (9502.T: Quote, Profile, Research, Stock Buzz) on Friday at that price, one source involved in the deal told Reuters, a 125 percent price rise in the industry's first deal in Asia this year.

"We will benchmark our prices to the Australian miner's," Shenhua Energy Co Ltd President Ling Wen told Reuters on the sidelines of a mining conference. "The prices are not definite yet, but we won't differ too much."

Shenhua's president said his firm has exported its 2007 cargoes for the financial year ending March 2008. He did not give the export price for shipments in the last financial year.

Shenhua Energy, the listed arm of China's top coal producer Shenhua Group, raised $8.9 billion last October in China's largest domestic initial public offering.

The company has said it was in talks to acquire coal assets in Mongolia, Indonesia and Australia to become a global player, which included the possible purchases of coal reserves totalling 27.4 billion tonnes in Indonesia's Kalimantan and Sumatra.

Ling said the firm was interested in joint ventures and diversifying into iron ore, for which prices have gained almost five-fold in the past decade as China's booming steel industry devours more feedstock.