HONG KONG - China Resources Power Holdings Co (CRP) said it's seeking to buy a controlling stake in a coal-mining project in Shanxi province, for about 6 billion yuan ($910 million).

Prices aren't final and the Hong Kong-listed power producer is still in talks on the potential purchase, Chief Financial Officer Wang Xiaobin said in an interview on Friday. She declined to identify the project or provide an estimate of the reserves.

China Resources Power is seeking to increase its coal assets to supply its power plants after higher fuel costs cut earnings in the first half of 2010. The utility plans to increase the total coal reserves it holds in China to two billion tons, the company said last year.

"This is part of China Resources Power's long-term plan of increasing its self-sufficiency in coal supplies to reduce cost risks," said Dave Dai, a Hong Kong-based analyst at Daiwa Securities Markets Co.

A 51 percent gain in first-half sales was partly offset by a 20 percent gain in coal prices, the utility said in August. Coal is used as fuel at about 80 percent of China's generators.

In 2010, average benchmark prices for power-station coal for immediate delivery at Qinhuangdao, China's largest port for the fuel, rose 25 percent to 747 yuan a ton, according to data from the China Coal Transport and Distribution Association.

The utility's shares have declined 4.9 percent in the past 12 months, compared with a 15 percent increase in the benchmark Hang Seng Index. China Resources Power rose 0.4 percent to HK$13.64 ($1.8) at 2:31 pm local time on Friday.

The company's capital spending will reach 18 billion yuan this year, with a third of that in renewable energy, including wind power, Wang said.

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China plans to more than double the generating capacity of wind farms to about 100,000 megawatts by the end of the decade.

About five percent of the electricity generated by China Resources Power was produced by wind turbines, gas-fired units and hydro plants, the company said last year.

The Chinese power producer may spend as much as 6.4 billion yuan adding 800 megawatts of wind power capacity every year, Liu Rixin, deputy-general manager of China Resources Power's renewable-energy unit, said on Thursday.

China is boosting the use of cleaner-burning fuels to help meet a goal to cut carbon emissions per unit of gross domestic product by as much as 45 percent of 2005 levels by 2020.

Shanxi produced 740 million tons of coal last year, trailing behind the 782 million tons mined in the Inner Mongolia autonomous region, the Xinhua News Agency reported on Wednesday.

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