China Coal seeks to clear the air
China Coal Energy, the nation's second-largest coal company by capitalisation, has launched construction on two new energy projects worth 1.66 billion yuan to create a higher margin production of clean fuel.
China Coal Energy's parent China National Coal Group said it had inaugurated the construction of a coal-to-methanol project with an annual output capacity of 250,000 tonnes and an oil shale-to-liquid fuel project in Heilongjiang province of northeastern China.
China Coal Energy's spokesman said the listed company wholly-owns both projects.
The projects were projected to bring in more than 300 million yuan of profit on more than one billion yuan of turnover annually, China National Coal said.
Methanol, a liquid fuel and an industrial chemical, will be produced from gas derived from coal in Harbin city. The city aims to replace pollution-prone coal gas with natural gas. Oil shale is fossil-fuel containing sedimentary rock. China Coal aims to turn 600,000 tonnes of oil shale into 12,000 tonnes of naphtha and 40,200 tonnes of light fuel oil annually.
Beijing has been encouraging its energy companies to increase their use of environmentally friendly fuel as part of its efforts to cut back on the country's choking pollution.
Separately, the company said that in the first four months of the year, it produced 15.6 per cent more commercial - or washed and processed - coal, to 21.08 million tonnes, compared with the same period last year. It also produced 29.12 million tonnes of raw coal in the four months, the company said, 24 per cent more than last year.
Commercial coal is the main revenue source for the company.
Output of coke, processed from coking coal and used in steel smelting, surged 56.8 per cent to 0.99 million tonnes.
The company did not provide sales price data.
According to an April 23 JP Morgan research report, China's spot market coal price fell some 7 per cent from a peak in February due to rising imports and a rise in seasonal hydro power output that cut coal demand. But year-to-date prices rose about 8 per cent year on year.
JP Morgan forecasted mainland spot coal prices would rise 8 per cent this year and 2 per cent next year.
