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China's biggest coal producer, China Shenhua Group, plans to invest 37.5 billion yuan (US$4.6 billion) by 2011 to build mining facilities in the Xinjiang Uygur Autonomous Region.

The Xinjiang subsidiary of the state-owned Shenhua Group will build new mines with a collective annual capacity of 16 million tons.

The company also intends to develop a 3.2-million-ton-per-annum coal liquefaction project, auxiliary generation facilities, as well as railways to transport coal from the region, according to a statement from the National Development and Reform Commission (NDRC).

These projects are scheduled to be operational by 2011, according to the NDRC statement. NDRC statistics also show that coal reserves in Xinjiang are estimated to be 2.19 trillion tons, or 40 percent of China's total.

"Xinjiang is the focus of our future development because of the region's coal reserves," said a company official from Beijing-based Shenhua, who also confirmed the new spending in Xinjiang.

"The biggest hurdle for developing Xinjiang's coal reserves is transportation - we just cannot get the coal out of there cheaply," Zhu Deren, vice-president of the China Coal Industry Association, was quoted as saying.

But these problems should be solved once the new projects kick into operation, Zhu added.

(Xinhua News Agency April 12, 2006)