Iron ore trader Abterra says it plans to increase the annual production capacity at its China coal mine to 900,000 tons by 2011. This is in line with the rising demand for coking coal, reported Channelnewsasia.com.

The firm expects to benefit from rising coking coal prices, which is driven by China's vigorous steel production. Coking coal is a key ingredient in the making of steel.

Recent media reports say China’s steel firms have been importing more iron ore in the last two months, and are paying more than benchmark prices.

Experts say China is expected to be a major buyer through the year and perhaps indefinitely.

Mainboard-listed Abterra says it has set ambitious targets to meet this demand, and has the resources to deliver on those targets.

The firm also plans to make strategic acquisitions of coking coal mines to grow its production capacity to five million tonnes per year in the next two to three years.