China coal update

OFFICIAL Chinese coal exports for 2000 amounted to 58.04 million tons, said Gary Cochrane, managing director of Sydney-based Asia Pacific Coal Services, from China.

Staff Reporter

This year, China plans to export 63 million tons of coal, adding 5 million tons of mostly thermal coal to last year`s figure.

Cohrane reported that new Chinese mining projects include the 5Mtpa Huojitou longwall mine of state-owned Shenhu Group, which began trial production last year. Shenhua also has a new open-cut operation called Zungeer with a capacity of 12Mtpa.

Shenhua has also won approvals to build a coal liquefaction plant, due to be commissioned at the end of 2005 and Cochrane said this plant will require feedstock of 12 Mtpa which will come from neighbouring mines. Over the next three to five years a further two underground mines will be developed to provide the necessary feedstock.

“The Shenhua liquifaction project will be supported by development and expansion of their Shangwang Underground coal mine which is currently an existing small underground mining operation,” Cochrane said. “Coal from this mine has already been successfully trialed for its suitability for coal to oil conversion.”

Shenhua is also progressing its three phase Shenhua project to lift coal production out of the Shenfu Donsheng Coalfield to 60 million tonnes by 2005. Development of mining is being accompanied by the parallel construction of over 1000 kilometres of rail links (Baotou-Shenmu line and Shenmu-Huanghua line), power plants, coal-port, shipping fleet and other auxiliary business and projects.

The Shenfu Dongsheng Coalfield in China’s Shaanxi Province has a proven coal reserve of 223.6 billion tonnes and a coal bearing area of 31,200 square kilometers.

The Pingshou Coal Administration has a new open-cut mine, Anjialing which commenced full scale production in September last year and is expected to produce up to 10Mt in 2001, ultimately increasing to 15Mtpa. The company’s An Tai Bao open-cut mine exported 7.5Mt in 2000. Half of the production from each mine is targeted for the export market, Cochrane said.

Yanzhou Coal Mining Company, the largest coal producer in East China, is ramping up production at its recently purchased Jining-3 coal mine in east China’s Shandong province. Earlier this year Yanzhou raised $US120 million to purchase the Jining-3 mine. The mine produced 1.7Mt in 2000 and is expected to produce 5Mt in 2001. Covering 110 square kilometers, the mine has a geological reserve of 880 million tons and a minable reserve of 535 million tons. Jining-3 is expected to register a profit of $US24 million in 2002 and $US36.1 million in 2003.

Meanwhile, at a February coal fair in Shandong province Shi Wanpeng, vice-minister of the State Economic and Trade Commission said China would control its coal output at around 950 million tons and continue to encourage coal exports this year.

At the same time, the country will continue to close down small and illegal coal mines and help those large and medium-sized coal enterprises to make up the deficit and start making profits.

Zhang Guobao, vice-minister of the State Development Planning Commission, said both coal supply and demand went up in 2000 thanks to steady economic growth.

China produced 957 million tons of coal last year, 473 million tons less than in 1998. The decline in production was attributed to the State`s control of the industry and closure of small mines.

Zhang also said China plans to put more capital into the development of coal technology. He said coal-liquefying technology had been listed as one of the 12 major developments during the country`s 10th Five-Year Plan (2001-2005).

Cochrane added that investment in coal technology includes investment in clean coal technology, environmental controls and importantly coal bed methane which has been given a high priority due to the high cost of oil imports in China.

“There have already been a a number of investigations into existing coal bed methane extraction and generating projects and technology globally, including that used at the Appin Mine in NSW,” Cochrane said.