Others News
- Daning mine gets green light
Date: 9-Aug-2007 Sources: (People's Daily)
A joint venture between two local energy companies and a US firm has been cleared to develop a coal mine in North China's Shanxi Province.
The provincial authority licensed the joint venture, Shanxi Asian American-Daning Energy Co (SAADEC), to develop the Daning coal mine in Jincheng.
SAADEC is 56 percent-owned by Asian American Coal, which comprises US energy firms and financial institutions including First Reserve, Evan Energy Co and Thai coal company Banpu.
Local firm Shanxi Lanhua Sci-Tech Venture Co Ltd takes a 36 percent share in the venture, and Shanxi Coal Transportation & Sales Corp (Jincheng) the remaining 8 percent stake.
The Daning mine has a reserve of 170 million tons of anthracite coal and an annual production capacity of 4 million tons. The total investment is $230 million.
SAADEC began building the coal mine in 2001 and started trial production last year. Its output was 2 million tons.
'We have brought a number of advanced technologies to the project to make it the safest and most environmentally friendly coal mine in the nation,' said Michael Cosgrove, chief executive officer of Asian American Coal.
The Daning mine will use advanced coalbed methane extraction technology. It will also have a gas-fired power plant with a capacity of 30 MW. A rail line will also be built to transport coal.
'We got into the Chinese coal industry in 1999. Now, we are focused on the nation,' said Cosgrove.
The company has also set up another joint venture to develop the Gaohe coal mine in Shanxi with an investment of $300 million. It expects to get a production license in 2009 for an annual output of 6 million tons, said Cosgrove.
Foreign investors have been cautious about getting into Chinese coal, largely due to its low profitability.
Leading global companies like Peabody and Anglo American have invested in the market but are yet to develop mines.
'Profit is a major concern for foreign companies looking to invest in China's coal industry,' said Liang Dunshi, an analyst with China National Coal Association.
And foreign investors must also contend with industry concerns that they are 'grabbing' the nation's coal resources, said Li Chaolin, an analyst at the association.
Coal will remain the nation's most important energy resource in the next few years. It now accounts for around 70 percent of the nation's energy mix.
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