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The Inner Mongolia Autonomous Region, in North China, is one of the country's biggest electricity generators, providing up to a third of the power used by Beijing every year.

As a key resource provider, the region delivered a total of 55.5 billion kWh to its surrounding provinces and municipalities by the end of 2006.

"Last year when Beijing and other places tried to restrict the use of power by switching it off, power exports from Inner Mongolia contributed greatly to help boost the coal-to-electricity strategy," Qiao Mu, vice-director of the provincial development and reform committee, told China Daily.

To date the installed power-generating capacity is 24.1 million kWh, and electricity output last year was 141.64 billion kWh.

Between 2005 and 2006 a number of new power plants started up, including the region's first natural gas-generated power plant and China's largest coal-fired power foundation - the phase three project of Datang Tuoketuo Power Plant in the capital city Hohhot.

Shangdu Power Plant in Xilingol League has generated 1.58 billion kWh. Renowned for being low cost and environmentally friendly, the plant has been a major player in the export of electricity to the country's south.

Inner Mongolia's powerful power production capacity is made largely possible by its richness in coal resources.

Latest data suggests the region's available coal reserves is 223.2 billion tons, second only to neighboring Shanxi Province.

Once the poorest city in the region, Erdos is now the largest coal-producing city in the country, accounting for up to 60 percent of its annual income.

Chu Bo, Party secretary of the region, said Inner Mongolia was determined to convert half of its coal into profitable commodities, including electricity, oil and other chemical products.

"How to make the best use of coal resources, to introduce coal chemical industries, including liquefied coal oil projects, is vital to our efforts to extend the industrial chain and increase industrial production value," Chu said.

Since 2000 a number of coal-related chemical industrial projects and oil-substitution projects have been launched in Inner Mongolia.

About 60 km southeast of Genghis Khan Tomb in Erdos is Shangwan, the mine area of Shenhua Group Corporation, the country's top coal producer.

Its liquefied coal oil project with an investment of 50 billion yuan ($6.6 billion) is in its final stage of construction and will start production later in the year, according to Wang Yulong, deputy manager in charge of the coal liquefying arm of the Liquefied Coal Oil Company of Shenhua Group.

Once finished, it is expected to process about 3.45 million tons of coal into 1.08 million tons of oil annually, including 720,000 tons of diesel.

"The vast 1.18 million sq km area of Inner Mongolia has rich reserves of coal, oil, natural gas, and non-ferrous metals - strongly supporting the region and the whole country's development," Chu said.

However, he stressed that the region's industrial development "does not" totally rely on coal sales, which contributes less than 8 percent to the local industrial production value, equal to dairy-related product sales.

The future development of the region will rely on a number of "sustainable" factors such as developing the region into a "recycle economy", Chu said.

(China Daily 08/08/2007 page5)