China Energy Corp. (“CEC”), through its subsidiaries, harvests and processes raw coal, as well as running a thermoelectric heat and power plant. CEC is an American-owned company that conducts it business in the Xuan Jia Wan District of Zhunger County, Inner Mongolia. This is an autonomous region of the People’s Republic of China, though power generation in the area is still highly regulated by the Chinese government.
The first of CEC’s two subsidiaries is known as The Inner Mongolia TeHong Coal and Power Company (a.k.a. “Coal Group”). By way of a major stake in the Lai Ye Gou Coal Mine, Coal Group currently produces about 500,000 tons of raw coal annually, though plans to enhance production and boost this figure to 1,200,000 are underway. It supplies large and middle-mass, as well as powdered coal to several power plants in the region. In 2007, the China Coal Industry Association named Coal Group one of China’s top 20 coal producers.
CEC’s power generation subsidiary is named Inner Mongolia Zhunger County Heat Power Company (a.k.a. “Heat Power”). It operates a newly-constructed thermoelectric heat and power plant that meets government standards with regard to environmental friendliness. Throughout the 120 hectares of the Xuan Jia Wan District, heat from this facility is distributed to customers through six older heating plants that have been converted to transfer stations. Having built precious contacts with local authorities, Heat Power has been granted a monopoly on heat supply for the entire district. It also supplies electricity to Xuan Jia Wan through a government-controlled intermediary known as Inner Mongolia Electric Power Group Co.
If a company can form positive relationships with the government as CEC has, China is a great place to do business. The country’s gross domestic product is expected to increase by as much as 9.6 percent in 2008, and its economy shows little sign of slowing, even as troubles continue in America and elsewhere. This puts CEC in an excellent position for growth. With one subsidiary having been named one of China’s top twenty coal producers, and the other having been granted a heat supply monopoly, the proof is in the pudding. Receiving these accolades leaves CEC poised to satisfy an even larger piece of China’s rapidly expanding energy demands.
The future looks bright for CEC and its subsidiaries. Heat Power continues to press for more heat supply monopolies, while Coal Group aims to boost production by at least twenty percent in the next year. Due to the sizable growth of the Chinese economy, the central gvernment is pushing for the development of more energy resources, and CEC is right in the middle.
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