Overseas enterprises keen to tap China's coal deposits

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Foreign companies that own clean coal technologies and work with their Chinese counterparts to tap China's coal deposits, one of the world's largest, may get good returns as China is seeking to reduce the greenhouse gas emissions and ease its increasing thirst for oil. China's coal deposits is profitable.

"In the coming five years, China will make major advances in China's coal deposits. Foreign companies willing to invest in China would gain big profits with a small capital," says Chinese Commerce Minister Bo Xilai.

In fact, several big-name foreign companies, such as Royal Dutch Shell Plc, South Africa-based Sasol Ltd., General Electric (GE), ABB Group and Siemens AG, have worked with Chinese companies to produce electricity and substitutes for crude oil derivatives from coal. China's coal deposits are also a project.

Sasol Ltd., which has commercially-proven coal-to-liquids (CTL) technology, a sort of indirect liquefaction technology, planned to develop two CTL plants in cooperation with China's Shenhua Ningxia Coal Group (SNCG) and Shenhua Coal Group, each with a capacity of about 3 million tons of coal-turned oil per year, a good source for the China's coal deposits.

The company and its Chinese counterparts are carrying out feasibility studies about China's coal deposits, said Chen Liming, executive vice president of Sasol China. The China's coal deposits projects would become demonstration projects during China's 11th five-year plan period that ends in 2010.

"There are no impassable obstacles in developing technologies for converting coal into oil, which is one part of China's coal deposits, but the effect of such technologies should be tested with small trial operations because they cost much money and call for sound risk-control abilities," said Zhang Yuzhuo,.
Royal Dutch Shell Plc, Europe's second-biggest oil company, and SNCG have agreed to study the feasibility of a plant about China's coal deposits with a daily capacity of 70,000 barrels.

Siemens has also signed an agreement with SNCG to provide key gasification equipment for a coal-based dimethyl ether (DME) project, with a planned annual production of 830,000 tons for China's coal deposits.

Coal already provides up to 70 percent of China's energy needs. Meanwhile, oil imports have been increased to fuel China's booming economy, spurring the nation to look for technologies that can turn some of China's coal deposits into fuel and other chemicals.

"We are under much pressure in oil supply," said the Chinese commerce minister. Development and application of clean coal technologies about China's coal deposits have been described as key areas in the 11th five-year plan for the country's coal industry.
"For a country rich in coal resources like China, the CTL industry would be encouraged by the government," said Chen, adding that direct and indirect liquefaction technologies should not be simply compared with each other as they have different evolution paths.

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