Shanxi, the Chinese province that produces more coal than any other, will sell three coal mines with combined reserves of up to 300 million tons by June.

 

Each of the three mines has a reserve of between 50-100 million tons, according to an official with the trading center of Shanxi Land and Resource Bureau.

 

Two of the mines are located in the counties of Lanxian and Xiangfen. The location of the third has not been disclosed.

 

The resource-rich province will sell the mining rights through a competitive bidding process, the official said.

 

"We have received approval from the provincial government," the official said.

 

According to industry regulations, coalmines with reserves of more than 100 million tons have to obtain national-level approval before they can be sold.

 

Those with less than 100 million tons of reserves can be sold with approval from the provincial government.

 

The government official yesterday refused to reveal how long the mining rights would last for, how much they wanted for them and whether foreign investors would be allowed to be involved.

 

Huang Teng, a senior industry consultant, who previously worked with China Coal, the country's second-biggest coal producer, said government policies do not block foreign control of coalmines, except for coking coal that is scarcer.

 

A researcher with the Ministry of Land and Resources, who declined to be identified, yesterday said the government was cautious about approving foreign ownership of China's energy resources.

 

China is the world's largest coal producer and consumer. Last year, the country produced 2.1 billion tons of coal to drive its fast-growing economy, a quarter of which came from Shanxi Province.

 

Wu Chenghou, executive director of China Coal Sales and Transportation Association, earlier said coal production this year is expected to be 2.26 billion tons, while demand could be 2.25 billion tons.

 

China, the world's second-largest energy consumer after the United States, depends on coal for about 70 percent of its energy needs.

 

The fuel will continue to be the country's primary energy source for the coming decades, industry analysts have said.

 

Meanwhile, the Chinese Government has invited bids to build three wind farms, which have a total capacity of 700 MW (megawatts), the nation's top economic planning body said.

 

The cost of building these farms could reach 7 billion yuan (US$863 million), an industry analyst predicted, saying costs could be up to 10,000 yuan (US$1,233) per kilowatt.

 

A wind power plant of 300 MW will be built in the Inner Mongolia Autonomous Region in North China.

 

Another farm with a capacity of 200 MW will be based elsewhere in the autonomous region, the last will be in Hebei Province, the National Development and Reform Commission (NDRC) said yesterday said on its website.

 

This is the fourth round of competitive bidding that the NDRC has conducted for wind farm construction in China since 2003.

 

By the end of last year, China had built wind farms with a total capacity of 1,260 MW.

 

That figure is scheduled to increase to 30,000 MW by the year 2020, the NDRC has said.

 

National wind power facility manufacturers are being told to participate in this bidding process.

 

Shi Pengfei, vice-president of the Chinese Wind Energy Association, said yesterday this would help increase domestic companies' involvement in wind farms.

 

The government says that at least 70 percent of generation facilities must be manufactured domestically.

 

And price will not be the only determining factor.

 

"Prices now count for only 30 percent towards whether a firm wins a bid, compared with the previous 40 percent," Shi yesterday told China Daily.

 

The remaining 70 percent will be decided by the quality of equipment, and a company's operation and management, he added.

 

(China Daily April 18, 2006)