Shenhua Group's Coal Business on Fast Track

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Shenhua Group Corporation Limited's (Beijing) coal business is expected to grow at a rate of 10.01% from now until 2010, while its power business is expected to keep its pace at 17%, reported China Stock Daily, an economic newspaper. About 6% of the coal produced in China is from Shenhua. Shenhua produced 101 million tons of coal in 2005, 129 million tons in 2005 and 136 million tons in 2006. In the first half of 2007, the company produced 76.6 million tons, which is about 6% to 7% of the market.

Shenhua Group owns Shensu-Suhuang Railway, one of China's key west-east coal transmission railways; Huanghua Port (Hebei Province), China's second-largest coal ports; and several coal ports in Tianjin City. These transportation networks give the company an edge against its competitors.

According to the company's plan, Shenhua's yield will break 200 million tons in 2010, making the 2008-to-2010 total as large as 540 million tons. Shenhua's coal-fired power plants are dotted along its coal mines and China's coastal area, which are linked by Shenhua's railways.

From now until 2009, Shenhua will build Phase II of the Sanhe power plant (Hebei Province), Phase III of the Zhunge'er power plant (Inner Mongolia), Phase II of the Ninghai power plant (Zhejiang Province) and Phase II of the Jinjie power plant (Shaanxi Province). The total generating capacity to be completed in the next three years is expected to exceed 8,000 megawatts.

Shenhua began its coal-liquefaction product line in Erdos City of the Inner Mongolia Autonomous Region. The project is nearing completion. Shenhua uses the factory to directly liquefy coal for deep processing, producing diesel, naphtha and liquefied petroleum gas (LPG). The first product line will process 3.44 million tons of coal to produce 102,100 tons of LPG, 249,900 tons of naphtha, 714,600 tons of diesel and 3,600 tons of phenol. A second product line will be built after the first one is running stably. Shenhua uses techniques developed by itself and the China Coal Research Institute.

Industrial Info Resources (IIR) is the leading marketing information services company for the industrial process, heavy manufacturing and energy-related markets throughout the world. Celebrating its 25th anniversary, IIR provides accurate and timely intelligence featuring plant and project information databases, focused market databases, industry forecasting, key industry contacts, industry and territorial map products, direct marketing services and applications, and daily industry news.