Markets | Thu Aug 28, 2008 1:13pm IST

China suspends all but two coal-to-oil projects

SHANGHAI Aug 28 (Reuters) - China has ordered the suspension of all but two coal-to-oil projects in the country, said the Ningxia Development and Reform Commission, in northwest China's Ningxia Autonomous Region.

The exceptions to the suspension are a project due for launch in Inner Mongolia this year by Shenhua Group, China's largest coal producer, and a second belonging to Shenhua's Ningxia Coal Industry Group and South Africa's Sasol Ltd (SOLJ.J), the commission said on its website (

The National Development and Reform Commission, China's top economic planning agency, recently issued a circular asking local governments to tighten administration of coal-to-oil projects, it said.

China should find the most suitable way of developing coal-to-oil operations via demonstration projects before moving on to the next step, the statement said. (Reporting by Rujun Shen; Editing by Edmund Klamann)