China’s Shenhua Group has started the construction of a RMB10bn ($1.5bn) coal-power and coking project in Inner Mongolia.

The plant is located in the industrial park of the Ganqimaodu Port in Inner Mongolia Autonomous Region to allow Shenhua to use the rich coal resources in Mongolia more efficiently.

The initial phase of construction of the project is due to become operational by 2012.

The facility, once complete, will be capable of washing six million tonnes of coal, coking 2.4 million tonnes of coal, and producing 240,000t of methanol and 30,000t of tar.