Shenhua Group, China Tobacco Agree to Develop 10 Billion-Metric-Ton Shanghaimiao Coal Mining Zone

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Researched by Industrial Info Resources (Sugar Land, Texas)--Shenhua Group Corporation Limited (Beijing), the largest coal producer in China, and China Tobacco Corporation (Beijing), with the governments of the Inner Mongolia and Ningxia autonomous regions, signed a cooperation agreement for the development of the Shanghaimiao Coal Mining Zone on March 12, 2010, in Beijing. Zhang Guobao, the director of the National Energy Administration (NEA), among other leaders and representatives, attended the signing ceremony, announced Shenhua Group on March 15.

The Shanghaimiao Coal Mining Zone is in Etuokeqian Qi of Ordos City, Inner Mongolia, covering a mining area of 682 square kilometers, with a total coal resource reserve of 14 billion metric tons. With the adjacent Ningdong Energy and Chemical Industry Base in Ningxia, there is an integrated coal field with a total coal resource reserve of 41.3 billion metric tons. Presently, the mining zone is divided into more than 20 plots, with independent mining rights owned by more than 10 enterprises.

According to the agreement, Shenhua Group and China Tobacco will establish a joint venture, with equal equity to develop the east plot of Shanghaimiao Coal Mining Zone, which covers Yushujing, Shanghaimiao No. 1 and Kapu-3 coal mines, as well as Leijiajing and Ximiao, which are two exploration areas. The total area of the east plot is about 512 square kilometers, with a total coal resource reserve of 10 billion metric tons. In addition, an energy and chemical industry base will be established to convert the coal into other products locally.

It's also specified in the agreement that a joint conference system and coordination team, with the participation of the NEA, the governments of Inner Mongolia and Ningxia, Shenhua Group and China Tobacco, will be established to solve key issues and to promote the cooperation process.

The signing of the agreement is a new step for the Chinese government in promoting the intensive and integrated development of coal resources. So far, China has planned 13 large-scale coal production bases in the country.

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