Located about 5km off the coast of Longkou city in eastern Shandong, the deposit is part of the coal-bearing basin formed in the Cenozoic Era with six coal seams potentially available for mining. A proven reserve of 1.29 billion tons of coal has been reported.

Initial exploration will be carried out some 350m below sea level.

The company said it had set up a sophisticated safety surveillance system and acquired the technology to prevent sea water flooding.

The deposit covers an area of 150 square kilometers, and is between 67-278m thick.