SteelOrbis Shangai
Xinjiang Uygur Autonomous Region in far northwestern China is fast becoming a new center for China's coal industry, constituting a strong pole of attraction for domestic mining enterprises as well as for downstream businesses including steelmakers.
To date the principal center of China's coal industry has been the northern province of Shanxi. However, the figures in the new analysis report regarding the coal industry investment environment in Xinjiang in 2007 have raised many eyebrows across the country. According to the report, the total coal reserves in Xinjiang are estimated at around 2.19 trillion metric tons, accounting for nearly 40.5 percent of explored national coal reserves. The report confirms the wealth of Xinjiang's coal reserves in addition to its crude oil and natural gas resources, and pushes Xinjiang ahead of Shanxi in terms of coal supply potential.
Currently, there is still no large-scale coal mining activity in Xinjiang. However, China's big coal and mining enterprises are expected to play a role in turning this province into a major coal producing center, while the state is planning to invest huge capital in the development of the coal industry in Xinjiang, in efforts to resolve the serious coal supply shortages in China which are a bottleneck in the way of China's economic development.
According to the latest national program for Xinjiang, by 2020 coal output in the province will take up more than 20 percent of the national total, namely reaching an annual volume of over 1 billion metric tons.
So far, over 10 big state-owned mining enterprises are planning immediate investment in Xinjiang with more than RMB 100 billion (USD 14.62 billion) involved. Besides the mining enterprises, steelmakers are also targeting the rich coal resources in Xinjiang. The latest statements from some of the big domestic steelmakers indicate that they have been making efforts to improve collaboration with the mining enterprises or to set up new venture capital companies with the miners for direct investment in coal mines, thereby to ensure stable, long-term supplies of this raw material.
Undoubtedly, a boom period is in store for the coal mining industry in Xinjiang; this will effectively lessen the current coal shortage situation in China and possibly contribute to the stabilization of coal prices in the long term.