Trading Markets citing Mr Cui Hongming Shenhua Ningxia Coal chief engineer as saying that Shenhua Ningxia Coal Industry's joint venture coal liquefaction project with Sasol is in the second phase of its feasibility study and will begin construction October 2010.

The project is expected to cost a total USD 7 billion and has a designed capacity to convert 3.2 million tonnes of coal.

Coal liquefaction used to excite Chinese enterprises with its high profitability and expandability which led to well-overdue construction project springing up around China. But at early September of last year, the National Development and Reform Commission, China's top economic planner ordered a halt on most coal liquefaction projects. Today only two remain standing with the Shenhua Ningxia project as one of them. But it still needs government approval before starting construction.

The first phase of the feasibility study began in 2005, and then in October 2008, the two parties signed a second-phase research agreement.

Shenghua Ningxia and Sasol are now preparing an environmental pollution evaluation report, soil and water conservation report and water resource demonstration report. They'll be submitted to the NDRC for examination and approval at this year end.

Coal liquefaction technology was developed in Germany during the 1920s.

Sasol is a leading global company engaged in the commercial production of synthetic fuels and chemicals from coal and natural gas.

(Sourced from Trading Markets)