China, the world's biggest coal producer and consumer, plans to spend about 40 billion yuan (US$5 billion) by 2020 exploring for coal reserves across the nation, a top energy official said.

The country aims to secure about 170 billion tons of coal reserves, Xu Dingming, head of the energy bureau under the National Development and Reform Commission (NDRC), said.

"The budget will be used between 2003 and 2020 to boost the nation's coal resources," said Xu, but he declined to disclose how much the country has spent up to now.

The move reflects the nation's vigorous efforts to secure sufficient energy resources in fuelling its fast growing economy, which grew by 10.3 per cent in the first quarter.

China so far has commercially recoverable coal reserves of 288 billion tons, with total estimated coal resources of 5.5 trillion tons, according to Zhang Yuzhuo, vice-president of China's biggest coal firm Shenhua Group.

"Companies are reluctant to invest in exploration due to its high risks, so we (the government) should step up efforts to look for more resources," said Xu.

The country last year yielded 2.19 billion tons of coal, with an annual increase of 24 per cent in coal production over the past five years, Xu said in a report.

Huang Teng, a senior coal analyst who previously worked at the country's second-largest coal producer China Coal, said that it would not be difficult to find coal resources of that scale in China.

"We could find more coal in the western regions such as Xinjiang, Shaanxi, Gangsu, Qinghai and even Tibet," said Huang.

Huang suggested the country establish an industry fund to help companies find more coal resources in the country.

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