Utilize provincial funds and technology to develop Shanxi's competitive local industry
Shanxi Tianhao Chemical Co., Ltd. recently broke ground on the first phase of a 300,000-ton methanol project backed by Shandong Yankuang Group. This marks another instance of Shanxi-based coal chemical companies leveraging external resources—often referred to as "borrowing from the east." Previously, major players like the Shanxi Lanhua Coal Industry Group and the Jincheng Anthracite Mining Group have entered into strategic partnerships with well-known chemical firms in other provinces, bringing in capital and advanced technologies to drive joint operations.
According to reports, many Shanxi enterprises are actively seeking investment, technology, and talent through such collaborations. Notable projects include Shandong Yankuang Group’s RMB 4.2 billion investment in Xiaoyi City, which will produce 300,000 tons of methanol annually and support a coal mine project with an annual output of 900,000 tons. Additionally, Shandong Luneng Group has also invested in projects in Shanxi, further highlighting the growing trend of cross-provincial cooperation in the coal chemical industry.
Shanxi Lanhua Coal Industry Group, a large integrated enterprise covering coal, chemicals, and pharmaceuticals, ranks among the top 34 dominant enterprises in the province, with total assets reaching 2.5 billion yuan. The company has focused on technological innovation, aiming to transform traditional coal into high-value chemical products and move from resource-based to tech-driven development. Recently, it signed a partnership with Shandong Jiutai Chemical Co., Ltd., which holds proprietary technology for dimethyl ether. Together, they plan to build a facility producing 1.5 million tons of methanol and 1 million tons of dimethyl ether annually, converting 2.5 million tons of coal each year and generating over 1 billion yuan in profit. This marks a significant step in Shanxi’s industrial upgrading using foreign expertise.
The Jincheng Anthracite Mining Group has also gained attention through its alliances with several Shandong-based chemical companies within a year. As one of China’s top 520 enterprises and a key player in Shanxi, Jincheng is developing a comprehensive strategy that includes coal, gas, electricity, and chemical industries. Recently, it partnered with Shandong Mingshui Chemical Co., Ltd., a leading producer of urea and ammonium bicarbonate, introducing their technology and establishing Shandong Mingshui Dahua Group. It later acquired a 38% stake in Shandong Union Chemicals, becoming its largest shareholder. In addition, Jincheng collaborated with Shandong Luneng Group and Shanxi Hexin Electric Power Development Co., Ltd. to build the Jindongnan Coal and Electricity Base, featuring a 40-million-ton coal mine, power plants, and coal chemical projects.
So far, the main focus of funds introduced by Shanxi enterprises has been to utilize local resources such as coke oven gas, low-quality coal, and coalbed methane to expand the methanol industry and promote deep processing projects. At the recent Shanxi Investment and Trade Fair, Acting Governor Yu Youjun emphasized that the province aims to attract investors in high-tech, financially viable sectors like coal chemical production, coalbed methane utilization, and synthetic oil development. Local advantages, including abundant coal reserves, low labor costs, and rich energy resources, were highlighted as key selling points.
According to estimates, during the “11th Five-Year Plan†period, Shanxi’s methanol and deep processing industries will see an investment of 24.1 billion yuan, creating 7.64 million tons of new annual production capacity, 19.2 billion yuan in additional sales revenue, and 6.3 billion yuan in profit and tax. Of this, investments from “Dongfeng†(eastern partners) are expected to reach 9.6 billion yuan, contributing 3.05 million tons of new methanol production, 7.9 billion yuan in sales, and 2.52 billion yuan in profit and tax annually.
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