What if Shanxi’s minable coal runs out? Don’t worry just yet. Xinjiang may have a lot more coal than Shanxi does; just some infrastructure and a transportation network are needed for the potential new coal province to take off. Translated by CDT from People Online:
Li Anming (ÊùéÂÆâÊòé) was one of many Shanxi’s coal lords, or private entrepreneurs who have been feverishly burrowing underneath the coal province, siphoning off the black gold that provides nearly 70% of China’s energy. In 2004, he sold off all his assets in his hometown and moved his whole family to Fukang City (ÈòúÂ∫∑Â∏Ç) in Xinjiang, the northwestern province of the Gobi desert.
Li didn’t go all the way, of course, for nothing. He invested over 100 million yuan of his coal wealth into a coke plant near Urumqi (‰πåÈ≤ÅÊú®ÈΩê) that promises to produce 90,000 tons of coke a year. But he doesn’t expect to see profits just yet, as the first three to five years would have to be the investment stage. He is not alone. Since 2004, more than 20 Shanxi coal bosses have come all the way to Xinjiang in a burgeoning coal rush. Recent government crackdowns on illegal mines have shut down a lot of private operations and at least 400 million yuan of private money has been freed up for new investments.
And Xinjiang may well be the next Shanxi, which produced 600 million tons of coal last year out of a total reserve of 260 billion tons. But some estimate that Shanxi may only have 26.8 billion tons of tappable reserve, or 76 years of mining life at a rate of 350 million tons a year.
On the northwest most frontier of China, Xinjiang boasts a total reserve of 2.19 trillion tons, or 40.5% of China’s total coal reserve. But Shanxi’s production capacity dwarfs that of Xinjiang, which mined almost 40 million tons last year, and will show a little increase this year. More importantly, Xinjiang has a very small percentage of coke (ÁѶÁÖ§), which is the most profitable type of coal. And many Shanxi coal businessmen visited and returned without much interest.
Still, less shrewd coal investors have smelled the opportunity for the future and snapped up as many reserves as possible. Some private businessmen from Zhejiang and Fujian have plunged big bucks to buy up untapped mining sites and wait for them to appreciate along the booming energy market and sell for profits.
Shanxi investors, however, are much less capitalistic. They are more interested in doing the real business. And some, like Zhang Jianping (张建平), have come not only with money but also with blueprints to build up coal-related industries or infrastructure facilities around coal reserves. Although transportation and infrastructure in Xinjiang have been undeveloped, the cheap labor and policy flexibility have been major attractions for coal lords from Shanxi. Zhang will need to invest more than 200 million yuan for a 600,000-ton mine. And he also expects to build up a coal-cleaning facility and some other coal chemical processing plants. The whole network of related industries will be three to five times that of coal itself, Zhang said. [Full Text in Chinese]
