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CHINA: SOUTH WEST ENERGY RESOURCES
MICK04011
RECEIVED IN REGISTRY
2 1SEP 1983
DESK OFFICER
INDEX
PA
REGISTRY
Action Taken
m
CM2619
Guizhou and Yunnan provinces in SW China have massive coal reserves but development of these has been hampered by lack of money and by the region's remoteness and inadequate infrastructure. In early 1982 a new corporation, The China Southwest Energy Resources United Development Corporation (CSERUDC) comprising representatives of the interested Ministries (coal, railways communications) and provinces (Guizhou, Yunnan, Guangdong Guangxi) as well as the Bank of China and Construction Bank, was set up with a view to accelerating the development of these reserves. Plans were drawn up to increase coal output from the existing 6 million tonnes to 10mt by 1985 and 20-25mt by 2000, to improve the rail link from the mines to ports in Guangdong Province and to improve the port facilities; the installation near the mines of new coal-fired power stations was also envisaged (total new capacity of perhaps 1800 to 2400 MW between 1986 and 2000).
A CSERUDC delegation led by the Vice Minister of Coal (Kong Xun) visited Europe in the summer of 1982. The programme included visits to four countries (France Germany, Belgium and Spain) whose companies are members of a consortium put together by an Israeli entrepreneur, Mr Shaul Eisenberg, to pursue this project. The delegation also visited Italy encouraged by Italian half-promises of soft finance. A visit to Britain was added to the programme as a result of an initiative by the British Longwall Mining Association (BIMA). During that visit GEC offered to undertake studies on projects of mutual interest in connection with the development of South West China energy resources eg power generating railway electrification or ports.
Over the past year since the Kong Xun delegation returned to China the various parties have kept in touch with each other eg during the visit to China by a UK business delegation under the leadership of Lord Nelson (Chairman of GEC and the then President of the Sino- British Trade Council) in November 1982 and a visit by a BLMA dele- gation to China in April 1983, but there has been little tangible progress and we remain uncertain how much priority the Chinese attach to this project in comparison with say coal projects elsewhere in China. There have also been reports that the Chinese are considering building a slurry pipeline rather than a railway (although there are technical problems in pipelines of such a length) or even that instead of exporting the coal they would use/to generate electricity locally and to promote economic development in the region.
It would be helpful if Lord Rhodes and his delegation could clarify up-to-date Chinese thinking on the project, and the possible scope for British companies to participate in it. The Department of Trade and Industry would be glad to pass any such information on to British industry.
OT4/2
Department of Trade and Industry
15 September 1983
No comments yet.
Private notes are available after approval.