China's biggest coal producer, China Shenhua Group, plans to invest 37.5 billion yuan (4.6 billion U.S. dollars) by the year 2011 to build coal mining facilities in the northwestern Xinjiang Uygur Autonomous Region.

The Xinjiang subsidiary of the state-owned Shenhua Group will build new mines with an annual capacity of 16 million tons, China Daily reported Wednesday.

The company will also develop a 3.2-million-ton-per-annum coal liquefaction project, auxiliary generation facilities, as well as railways to transport coal from the region, according to a statement from the National Development and Reform Commission (NDRC).

These projects are scheduled to come on stream by the year 2011, according to the NDRC statement. NDRC statistics also show that estimated coal reserves in Xinjiang amount to 2.19 trillion tons, 40 percent of China's total.

"Xinjiang is the focus of our future development because of the region's coal reserves," a company official from Beijing-based Shenhua told China Daily, who also confirmed the new spending in Xinjiang.

"The biggest hurdle for developing Xinjiang's coal reserves is transportation - we just cannot get the coal out of there cheaply, " Zhu Deren, vice-president of the China Coal Industry Association, was quoted as saying.

But with the coming of new rail facilities as well as advanced technology to turn coal into oil, there are good prospects for those developing coal reserves in Xinjiang, Zhu added.

Source: China Daily