China’s biggest miner has announced has begun work on a $24bn plant to turn China’s future coal surpluses into chemicals.
China Energy Investment (CEIC) said it is building the plant in Hami City, in the Xinjiang Uygur Autonomous Region.
The aim is to use renewable energy to turn coal into oil and oil into plastics and other products. When fully operational, the facility will be able to output 4 million tonnes of oil a year.
Zhou Xin, a project manager on the scheme, said in a CCTV video that the first phase of the project would be commissioned by the end of 2027, and would create 5,500 direct jobs.
He added that the project would “significantly enhance the industrial potential of surrounding areas
The scale of CEIC’s plant and its “second generation” technology should allows it to mine and liquefy the coal at a reasonable profit despite an over-rapid expansion of the petrochemical sector, which has suppressed demand for feedstock.
The new liquefaction methods were developed at China’s Ordos plant, developed in the Inner Mongolia Autonomous Region in 2008.
The facility will be the latest in a series of coal-to-oil developments in the mining hubs of Xinjiang, Shaanxi, Ningxia and Inner Mongolia.
The move is an indication that China is about to reach peak coal. Last year, China Petrochemical said it expected coal consumption to fall from 4.7 billion tonnes in 2023 to 4.4 billion in 2025.
The development is in line with President Xi Jinping’s aim of reducing coal consumption from 2026 onwards, in order to reach net zero carbon by 2060.
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