CHINA'S SEARCH FOR COAL SHIFTS TO REMOTE AREAS FLEDGLING FIRM TO DEVELOP NORTHWEST FIELD

CHINA'S SEARCH FOR COAL SHIFTS TO REMOTE AREAS FLEDGLING FIRM TO DEVELOP NORTHWEST FIELD

In hopes of finding fresh supplies, China aims to shift the focus of new coal production to the northwest.

Northwest China, a remote and large undeveloped area, comprises Gansu, Shaanxi and Qinghai provinces and the so-called autonomous regions of Xinjiang and Ningxia. The biggest coal producers now are in north-central China, chiefly Shanxi and adjacent Shaanxi provinces.The Ministry of Coal Industry will build nine coal mines in Gansu, Shaanxi and Ningxia in the 1996-2000 period, Bai Shi, deputy general manager of China National Coal Import & Export Corp., said recently.

Under the blueprint, northwestern China will produce 140 million metric tons by the end of the decade, accounting for 9.5 percent of the country's total, and more than 200 million tons in 2010, accounting for 11.6 percent.

Coal reserves in the northwest totaled 300 billion tons by the end of 1993, officials say, about 30 percent of the country's total. The five provinces cut 100 million tons of coal last year, just 8 percent of the country's total, ministry statistics show.

China's governing State Council last month approved the establishment of Shenhua Group Corp., which will develop and operate the Shenfu-Dongsheng coal field, the largest of its kind in China, and related railways and power stations.

The field, spreading 12,000 square miles beneath Shaanxi and into Inner Mongolia, has reserves of 223.6 billion tons, or a quarter of the country's verified reserves. Construction of mines is expected to be complete around 2010 with annual production of 60 million tons.

A 560-mile rail line, a new port capable of handling 35 million tons of cargo a year and pithead power plants with combined generating capacity of 942,000 kilowatts are proposed for the area. Total investment is projected at 60 billion yuan ($7.2 billion).

The coal field eventually will have annual capacity of 100 million tons, officials said.

An electrified rail line from Baoji in Shaanxi to Zhongwei in Ningxia opened to traffic June 1. The 310-mile route has annual capability of 15 million tons.

Pittsburgh-based Custom Coals Co. is building what is billed as the world's longest coal slurry pipeline, 500 miles from Shaanxi to the coast in Shandong province. The $888.6 million project includes a coal washery and port facilities.

Fueled by the northwestern development, China's annual coal output should reach 1.45 billion tons by the end of the decade, with exports of 50 million tons, Mr. Bai said.

China produces a fraction over 1 billion tons. Exports of coal and coke rebounded last year after three years of stagnation. Mr. Bai's firm said it exported 22.34 million tons of coal and 147,000 tons of coke, increases of 22 percent and 103 percent, respectively, over 1993.

Customs statistics show total coal export volume in 1994 was 24.3 million tons worth $770.94 million. That compares with 19.8 million tons worth $702.24 million in 1993.

Overall coke exports last year amounted to 4.04 million tons, earning $282 million. In 1993, coke shipments totalled 2.61 million tons worth $171 million.