Chinese Studies - Coal-based chemical sector to grow rapidly

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Coal-based chemical sector to grow rapidly
By Xiao Wan
Updated: 2007-09-18 07:22

State Councilor Hua Jianmin (center) pays a visit to the first China
(Taiyuan) International Coal & Energy New Industry Expo yesterday. Guo
Yingguang
"Our land is China's Middle East. We have heaven's blessings," said Ling
Zhengce, director of the Development and Reform Commission of Shanxi
Province, China's largest coal-mining base.

In an interview with China Daily during the seminar session of China
(Taiyuan) International Coal & Energy New Industry Expo 2007, the
province's leading economic planner said Shanxi will continue to serve as
China's major energy supplier for the next 30 or more years.



Shanxi Province yields 580 million tons of coal every year, or 75 percent
of China's cross-province shipments of coal.

But that, Ling pointed out, refers to the yield from no more than 70
percent of Shanxi's land. Around 30 percent of the province is yet to
undergo extensive geological surveying.

Even when the price of crude oil was around $10 per barrel, Ling said he
was convinced that the day was not far when coal would gain more
importance.

Now, when crude oil price has edged towards $80, he thinks Shanxi's hour
has come. "The inevitable (as he foresaw in the 1980s) has happened," he
said. "Across the globe, the coal-based chemical industry will begin to
see some major development - whenever alternative energies are to be
developed."

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The role that the province can play at this historic juncture, said the
Shanxi-born economist, is not just to serve as a supplier of raw energy
materials, but more importantly, as an operator of an extended value
chain based on its extraordinarily rich coal resources.

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Before the end of China's 11th Five-Year Plan (2006-10), Shanxi will
witness an important breakthrough in the coal-based chemical industry,
especially methanol-based and coke-based value-added processing, Ling
said. "Shanxi's economic take-off would be just empty talk without such
operations," he declared.

The present development focus will remain primarily confined to that
scope, before it stretches beyond methanol to the more profitable
industries, he added.

Although Shanxi has made substantial progress in coal mining,
environmental protection and in shutting down the privately owned and
often hazardous small mining companies, it still has major gaps to close
to reach the level of developed countries in coal-based chemical
industry, Ling admitted.

Fortunately, it has been a consensus among top provincial officials that
changes must happen in that direction, and policies have been formulated
to boost those new industries, he said.

Though it has only just been a couple of weeks since Meng Xuenong became
the acting provincial governor of Shanxi, he has already exhibited great
interest in such ideas as sustainable development for Shanxi's coal-based
economy.

"So it is also inevitable that Shanxi will, beginning from this year, be
the host of China's top coal industry expo," noted Ling.



(China Daily 09/18/2007 page5)

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