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 (www.nxdrc.gov.cn).

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)

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