SINGAPORE: China Resources (CR) Power Holdings will soon finalise coal mine buys in northern Shanxi province and aims to boost self-sufficiency in coal to around a third of consumption in 2012, a top official said yesterday.

China's fourth-largest listed power company by market value will also invest almost US$1.5 billion (US$1 = RM3.21) a year in renewable energy for up to five years, chief executive Wang Shuai Ting said in an interview.

It is expected to buy 21 coal mines in Taiyuan, capital of the province, with total production capacity of more than 7 million tonnes per year (tpy) and consolidate them into 13 mines, he said.

This will follow its purchase of 39 coal mines in Shanxi last year via joint venture Shanxi China Resources Liansheng Energy, as CR Power aims to tie up coal supplies and cut costs.

"It will drastically lower our exposure to high coal prices and raise our profitability," Wang said on the sidelines of a regional power conference in Singapore.

After completing the latest acquisition, whose value Wang did not reveal, CR Power will carry out technology upgrades and expansion of coal mines.

The company's total coal production will be boosted to more than 30 million tonnes in 2012, accounting for around a third of its coal consumption, he added.

China, the world's largest coal producer, has ordered the consolidation or takeover of many small coal mines to regulate them better and improve its safety record.

China's cabinet aims to shut down more than 50 gigawatts of small coal-fired power generators and 8,000 small coal mines this year.

CR Power's net profit soared 210 per cent on the year, to HK$5.32 billion (HK$100 = RM41.35) in 2009 on lower fuel costs and higher electricity sales.

Shares of CR Power rose 6.8 per cent this year to close at HK$16.62 on Thursday. The Hong Kong stock market was closed yesterday.

The company will pump 8 billion yuan to 10 billion yuan (100 yuan = RM47) annually in renewable energy over the next three to five years and boost renewable energy to account for 15 per cent of its energy mix, up from 4.7 per cent now, Wang said.

Renewable energy mainly includes hydro, wind and solar power.

The company's wind power capacity will be raised to 5,000 megawatts in around 2014 from 400 megawatts now, he added.

"Obviously, the investment return ratio of new energy is much lower than that of conventional energy. But by buying coal mines we can raise our profitability in conventional energy, which will offset the lower profitability of new energy," Wang said.

"Thus the investment return ratio of the whole company will remain stable."CR Power had said it planned to take a 25 per cent stake in a 25 billion yuan nuclear power project in southern Hunan province.

The economic stimulus funds flowing into China's renewable energy sector is luring an increasing number of companies to boost investment in the sector. Beijing aims to generate up to 15 per cent of its total electricity output from clean sources of power such as nuclear by 2020