China Lifts Coal Price Barrier for Power Co.

The National Development and Reform Commission (NDRC) said here Friday that the coal supply in 2006 will be enough to meet the market demand, therefore the government will call off price control measures against power companies adopted at the end of last year.

The coal producers and power companies may negotiate the coal prices themselves, said the NDRC.

But the NDRC urged both sides should decide the price in a rational way. And to prevent unexpected soaring coal prices under the new mechanism, the NDRC will also set up an emergent-reacting system to ensure the stable market.

China has decided the total amount of railway transportation of key coal products would be controlled within 690 million tons in 2006.

Currently, China's coal transport capacity on railways can only meet 35 percent of the market demand, said the NDRC.

The association predicted that China is expected to need a total of 2.15 billion tons of coal in 2006, 150 million tons more than this year.