August 2, 2017 / 11:15 AM / a year ago

China approves 6 mln tonne Xinjiang coal project to ease supply concerns

BEIJING, Aug 2 (Reuters) - China’s state planner gave the green light to a coal mining project with annual capacity of 6 million tonnes, despite its campaign to close some inefficient mines.

Shanghai-listed Guanghui Energy Co Ltd, a subsidiary of Xinjiang Guanghui Industry Investment Group, said in a statement on Wednesday that it had received approval from the National Development and Reform Commission (NDRC) for its Baishihu open-pit coal mine in western province Xinjiang.

By 2020, the Chinese government has said it aims to close 800 million tonnes of outdated coal capacity. But earlier this month, amid concerns over tightening supply and rising coal prices, NDRC said that 200 million tonnes of new coal capacity will be launched this year.

Thermal coal prices have surged 44.4 percent this year, hitting a record high on July 17 of 616.6 yuan ($91.74) a tonne, sparked by supply worries amid peaking demand during a hot summer.

A total of 2.97 billion yuan ($441.89 million) will be invested in the first stage of the project, which will also include a coal preparation plant alongside the coal mine.

$1 = 6.7212 Chinese yuan renminbi Reporting by Muyu Xu and Beijing Newsroom; Editing by Adrian Croft

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