Originally published by Reuters, 07 June 2010

By Lucy Hornby

BEIJING, June 8 (Reuters) – Chinese power company Huaneng plans to spend more than 100 billion yuan ($14.64 billion) in coal, natural gas and power generation in the far western region of Xinjiang, home to vast deposits of untapped coal.

Huaneng Group signed an agreement with the Xinjiang government on Monday to construct energy bases in the Junggar Basin, the Turpan Basin and Hami, better known for its melon production, the Xinhua news agency said on Tuesday.

China recently unveiled a plan for developing Xinjiang, an energy-rich region bordering central Asia that is home to Uighurs, a Muslim, Turkic-speaking people who often chafe at rule from Beijing and at the influx of Han Chinese [ID:nTOE64J09I].

Northern Xinjiang is already home to massive Chinese oil and gas projects, and new roads and rail make coal deposits accessible for transport to booming eastern China.

Huaneng plans to install annual power generating capacity of 10 million kilowatts in Xinjiang by the end of 2020, while producing 60 million tonnes of coal and 6 billion cubic meters of natural gas derived from coal, Xinhua said, citing general manager Cao Peixi.

It would buy up coal deposits and install hydropower and wind power projects, Xinhua said.

China has promoted the development of coal and power projects further and further west, as rapid growth has depleted traditional deposits and as wealthier eastern cities grow increasingly concerned about the effects of severe air, water and soil pollution.

Exile Uighur groups have said that the heavy emphasis on exploiting Xinjiang’s natural resources will benefit Chinese state-owned firms and Han Chinese migrants, rather than benefitting Uighurs who get little backing for farming or businesses and resent China’s religious and linguistic restrictions.

Han Chinese now make up about half of Xinjiang’s population.

State-owned Huaneng, China’s largest power firm, was headed until 2008 by Li Xiaopeng, the son of former Chinese premier Li Peng.

Xinjiang covers about one-sixth of the landmass of the People’s Republic of China, and contains an estimated 40 percent of its coal reserves as well as oil and natural gas deposits.

As part of the development plan, hammered out during a work conference held in Beijing in May, Xinjiang will pioneer the assessment of oil, gas and coal taxes based on price, not quantity. The tax reform is designed to retain more revenues in the jurisdiction that holds the resource deposit [ID:nTOE64P055]. ($1=6.832 Yuan)

http://www.reuters.com/article/utilitiesSector/idUSTOE65700920100608