Shenhua faces obstacle to global ambitions

China Shenhua Group, which owns the second-largest coal reserves in the world, has hit a roadblock in its plans to expand abroad and transform itself into a diversified giant as foreign mining firms shun the company because they cannot gain access to the mainland’s resources given Beijing’s tight control. China Shenhua Energy Chief Executive Chen Biting in 2007 said the company was looking for acquisitions in Australia, Indonesia and Mongolia. Diversification would take place at the parent level while the listed firm would remain a pure coal player, at least in the near to medium term, sources said. China Shenhua this year also sought closer ties with Anglo American, the world’s second-largest miner, including buying as much as 10% in the London-listed firm. (July 21, 2008)