Yankuang Xinjiang Energy Begins Construction of 600,000-Ton Methanol and Ammonia Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--A foundation-laying ceremony was held on November 18 for Yankuang Xinjiang Energy & Chemical Company's (YCMGC) (Yanzhou, Shandong) 600,000-ton methanol and ammonia project at the Hi-tech Industry Park of the Ganquanpu Industry Zone in Urumchi, the capital of the Xinjiang Autonomous Region. The project has a total estimated investment of about $588 million, YCMGC announced on November 24. YCMGC is a leading coal producer in China and the holding company of Yanzhou Coal Mining Company Limited (NYSE:YZC) (Yanzhou, Shandong).

The estimated resource reserve of coal in Xinjiang accounts for about 40% of China's total, and the proven coal reserve in Shandong only accounts for 3% of China's total, which can last for about 20 years based on the present exploitation level, YCMGC General Manager Wang Xin said. The quality of coal from Xinjiang is good, which is suitable for the development of the coal chemical industry, he said. Xinjiang also has a unique regional advantage. Deployed in Xinjiang, YCMGC has established an important platform for the market in central Asia.

In June 2007, YCMGC signed a framework agreement regarding the development of coal, power and chemicals in Xinjiang with the regional government. The new 600,000-ton methanol and ammonia project is the first project as part of that agreement. The project will produce 300,000 metric tons of synthetic ammonia and 520,000 metric tons of urea per year upon completion. According to the framework agreement, YCMGC will invest between $740 million and $1.03 billion to expand its coal production output to 5 million-10 million tons with related coal chemical production devices in Xinjiang by 2010.

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