Inner Mongolia wants to double its coal output in the next five years and aims to ultimately overtake Shanxi Province, the country's largest coal-producing region.

The north China autonomous region expects to produce 500 million tons by 2010 from the 201 million tons last year, said Wang Wangwang, director of the region's coal industrial administration.

To reach the target, the coal-rich area is seeking at least 30 billion yuan (US$3.7 billion) in new investment, Bloomberg quoted Wang as saying.

"The new investors include both domestic and foreign companies," Wang said.

Wang said Shanxi Province after years of high production faces difficulties in keeping up the pace; while for Xinjiang Uygur Autonomous Region, which is also rich in coal resources, transport costs to the energy-hungry east are very high.

North China's Shanxi Province produced 493 million tons of coal last year, and annual output is estimated to rise 3.4 percent to 510 million tons this year, and reach 650 million tons by 2010.

The figures signal a much slower pace in annual production growth compared with the previous year, which stood at 10 percent, figures from the province show.

According to Wang, Inner Mongolia has proven reserves of 230 billion tons.

Among the reserves, there are as many as eight coal fields with at least 10 billion tons of reserves, 11 fields with less than 10 billion tons but more than 1 billion tons, as well as 12 fields with less than 1 billion but more than 100 million tons, Wang said.

"We aim to be the country's No 1 coal producer, by making most of the region's rich coal reserves," said Wang. But he did not elaborate on the timetable of this ambitious objective.

A senior industry analyst, Huang Teng of Beijing LT Consultants Ltd, told China Daily that Inner Mongolia's goal is achievable in terms of the quantity of coal production given the region's already proven reserves and future potential, but the quality would not match that produced by Shanxi mines.

Wang said the autonomous region would start 16 coal mining projects this year, and as many as 56 new projects in the next few years.

The region also plans to boost consolidation of existing mines in line with the country' coal industrial development blueprint.

"We will set up seven large coal-producing bases able to yield at least 50 million tons of coal annually, 11 coal companies with an annual output of 10 million tons, as well as five 5-million-per-annum coal-to-methanol bases," said Wang.

The National Development and Reform Commission - the nation's policy-making body last year detailed a long-term industrial blueprint to forge 13 coal-producing bases across the country in the resource-abundant areas such as Shanxi and Inner Mongolia through mergers and acquisitions.

The move aims to boost production efficiency and improve safety standards.

China, the world's second-largest energy consumer after the United States, produced 1.96 billion tons of coal last year, an increase of 19 percent year-on-year.

(China Daily August 18, 2005)