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Coal-rich Hegang attracts big facilities

By Tian Tian (China Daily)
Updated: 2008-08-21 10:51

Along with other coal cities in Heilongjiang province, Hegang has seen a rising number of large projects in recent years due to its abundant natural resources.

One of the biggest is the Huahe Coal Chemical Co jointly capitalized by the China National Chemical Engineering Group Corp and the Hegang-based Kunpeng Coking Co Ltd.

The facility about 1,500 m from a city railway station has a planned production capacity of 1.2 million tons of methanol.

Preparatory work for the project, including roads, water supplies and electricity, has been completed, said Tian Jun, former vice director of the Hegang Economic and Trade Commission.

Tian attributed inception of the massive project to Hegang's high-quality coal.

"The city has abundant coal reserves very suitable for production of methanol," he said.

According to the Hegang government, the city has more than 2 billion tons in coal reserves, enough to last more than a century, according to current projections.

Hegang now produces over 21 million tons of coal annually and is developing a number of new mines.

"After operation of new mines, the annual capacity will be greatly increased," Tian said.

Tian said plentiful electricity and water also help the city attract a rising number of big projects.

Insiders said that the methanol project will help the country meet expanding market demand.

"There is an increasing demand of the methanol in the domestic market due to skyrocketing oil prices," said Liu Shifang, a manager of the project.

China consumed about 11 million tons of methanol last year, nearly half of which was imported, according to Liu.

"Besides the fast growth in the domestic market, the rising price of methanol in recent years has also pushed us to approve the project in Hegang," said Liu.

The city has also attracted more than 20 coal-chemical projects with a combined investment of about 40 billion yuan ($5.84 billion).

One is Hegang Boda Investment Co Ltd, which joined with Liaoning-based Beitai Iron and Steel Group Co Ltd to develop a 6 billion yuan ammonia and carbamide project in 2005.

Facility with a designed production capacity of 600,000 tons of ammonia and 1 million tons of carbamide is expected to generate revenue of more than 1.7 billion yuan annually.