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China sets up firm

to develop biggest

coal mine

BEIJING: China has set up a state-owned shareholding company to develop the country's largest coal mine and railway lines, port facilities, power stations and ships that will transport and use the coal, a company official said.

Shenhua Group Corp has registered capital of 2.58 billion yuan and will develop the Shenfu-Dongsheng coal mine, which stretches from northern Shaanxi province to Inner Mongolia with coal reserves of 223.6 billion tonnes, a quarter of China's known reserves, he said.

The total cost of the project over the next 15 years will be 60 billion yuan, he said.

By 2010, the mine aims to produce 60 million tonnes a year, rising to 100 million tonnes a year in the future, he said.

By 2010, Shenhua will also have built a 900 kilometre railway line from the mine to the east coast city of Huanghua in Hebei province, where it will build a new port able to handle 35 million tonnes of cargo a year, he said.

The firm will also build pit power stations with a combined generating capacity of 942 megawatts and buy ships to carry the coal to foreign markets, he said.

Shenhua has taken over the entire capital of 10 billion yuan of Huaneng Jingmei Corp, a former member of the Huaneng Group that has ceased to exist, the official said. All the registered capital is coming from the state, he said.

State-owned Huaneng Jingmei was set up in 1985 and has been involved in mining coal from small and medium-size mines in the Shenfu-Dongsheng region, the Shenhua spokesman said. All the company's investment, which will be taken over by the new firm, is in that region, he said.

The source for the remaining 50 billion yuan has not been decided and the company hopes to attract foreign investment, he said. It has already held talks with several prospective foreign parties, he said.

China is already the world's biggest coal producer and a major coal exporter.

In the first seven months, coal output was 729.45 million tonnes, up 8.49 percent over the same 1994 period, and exports were 15.43 million tonnes, up 26.5 percent, official figures show.-Reuter