Shenhua Ningxia Coal Industry Company, a division of Shenhua Group (601088.SH; 1088.HK), China's biggest coal producer, has begun construction of a 1000 square kilometer coal-chemical complex in northwest China's Ningxia province. The 280 billion yuan (40 billion USD) project, located at Ningdong, 42 kilometers southeast of provincial capital, Yinchuan, will include coal production, electricity generation and coal chemicals, including coal to liquid fuel conversion (CTL). A methanol plant is already in production, a propylene plant is due to complete construction in 2009, and two coal-to-oil plants are expected to begin operation in 2012. The entire project will be completed in 2020.
Methanol plant at Shenhua Group's new coal-chemical complex in Ningdong, Ningxia Hui Autonomous Region.
Ningdong has proven recoverable coal reserves of 27.3 billion tons. By 2020 it will be one of 30 key coal production areas in China with an output of more than 100 million tons per year. The coal is high quality, with low sulfur content, ideal for both chemical industry and power generation. By the time the base is fully operational in 2020 it will have eight power plants with a capacity of 30 million KW of which 10 million KW will be exported to other provinces.