Coal shares tumble on output increase

Share prices of coal and petrochemical companies plunged after the Chinese government began a policy blitz intended to tame prices and ease the nation's power crisis.

Yanzhou Coal Mining (1171) plunged 10.67 percent while China Coal Energy (1898) tumbled 5.81 percent yesterday.

The three largest state-owned oil companies also saw drops ranging from 0.7 percent to 2.3 percent.

The National Development and Reform Commission, China's top economic planning agency, said the average daily coal output of state-owned enterprises has increased 8 percent since September 27.

It said late Tuesday that it aims to increase coal output to 12 million tons a day, and will give the fuel priority in deliveries through ports and over railroads. It's also evaluating other measures to intervene in prices and has "zero tolerance" for those spreading false information or collusion in the market, according to a statement.

Vice-Premier Han Zheng also called for "powerful measures" against speculation and hoarding in the energy sector, and said a better market-oriented system for coal and electricity prices will help ensure stable supply, China National Radio reported Tuesday.

Regional authorities are also stepping in.

Officials in Yulin, a coal mining hub in Shaanxi province, have asked state-owned mines there to immediately lower prices by 100 yuan (HK$122) a tonne, with harsh measures being threatened for any companies that don't comply, industry publication China Coal Resource reported, without citing its sources.