Reserves for the project are estimated at more than 1.7 billion mt of low-sulphur steam coal. Designed for an annual production capacity of 20 million mt of raw coal, Zhungeer has 79-year projected mine life. The total investment for the project amounted to 7 billion yuan ($1 billion), the company said.

According to Shenua, the Zhungeer project is a cornerstone of a larger national energy base planned for the region and it will help ease the pressure on the country’s energy sector.

Beijing-based Shenhua Group is China's leading coal producer. The company recently posted coal output and sales figures that increased 17% and 12% yearon- year during the first nine months of 2008, to hit 204 million mt and 234 million mt respectively.