Group builds pipeline for coal

CHINA Strategic Holdings says its Australian-listed subsidiary is leading an international consortium to build the first mainland coal slurry pipeline, estimated to cost US$888 million.

It said yesterday the 800-kilometre underground pipeline would run from Shanxi, one of China's main coal producing areas, to the coastal province of Shandong and would be the longest in the world.

An agreement had been signed between China Coal Constructional and Development Corp (CCCDC) - the operating arm of the Ministry of Coal Industry - and the consortium led by China Strategic's 50 per cent owned Australian-listed subsidiary, Medical Research International.

Also included in the consortium are Customs Coal Corp, a coal cleaning technological firm in the United States; Goldman Sachs, a US investment bank; William Technologies, the owner of the longest coal slurry pipeline in the world now; and Wilbros Butler Engineering, the world's largest pipeline construction contractor.

The consortium will operate the joint venture as China Pipeline Holdings, which will have a 51 per cent holding in the project. The remaining stake in the project will be held by CCCDC.

The mammoth project will be financed by way of debts and international public financing.

China Strategic said Medical Research will hold a 32 per cent interest in the project.