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Latest Progress on Xinjiang’s Coal-to-Oil Project Author/Source: Coal Chemical Industry 114 Forum Date: 2021-09-10 Clicks: 11 On the morning of September 3, 2021, Tohti Yakup, Deputy Director of the People’s Congress of the Xinjiang Uyghur Autonomous Region, along with a delegation, visited Yitai Ili Energy Co., Ltd. for an inspection and investigation, accompanied by Tong Xueqin, Secretary of the Party Leadership Group of the Chabuchar County People’s Congress, as well as leaders from relevant county departments. Tohti Yakup and his party first arrived at the facility area of Yili Energy Company, where they obtained detailed information on aspects such as project construction, manufacturing processes, environmental protection measures, as well as power and water supply, land use, and raw materials for the coal mine and the project. Subsequently, a discussion was held with Wang Jintang, chairman of Yili Energy Company, Shi Jianhua, deputy general manager, as well as relevant personnel from various departments and mining companies. At the discussion session, Wang Jun said that the purpose of this inspection was to assist and support enterprises, by gaining an in-depth understanding of the progress of project construction as well as the difficulties encountered, so as to carry out further coordination and assistance efforts. Wang Jintang, chairman of Yili Energy Company, gave a detailed report on aspects such as the company’s development history, the progress of its projects, the existing difficulties, and suggestions. During the discussion, the inspection team and Yitai Company had an in-depth exchange of views on the difficulties existing in the current project and possible solutions. Tohti Yakup put forward several expectations: First, enterprises should enhance their understanding and study the relevant documents and policies issued by the Party Committee of the autonomous region regarding key construction projects; in particular, they need to fully comprehend and make good use of the policies designed to support and assist the development of enterprises. Secondly, as a **key demonstration project and the only coal-to-oil demonstration project in the Xinjiang Uygur Autonomous Region, the enterprise must strive to overcome difficulties, accelerate the construction progress, and bring the project online as soon as possible, so that the efforts invested over the past decade or so can yield benefits and returns at the earliest possible time. Thirdly, work safety is one of the key tasks outlined by the Party Committee of the autonomous region under the \"3+1\" framework; \"work safety is the lifeblood of enterprises.\" Whether it is coal mining projects or coal-to-oil projects, safety measures must be properly implemented during both the construction phase and the operational phase. Fourth, enterprises must fully implement the relevant policies regarding environmental protection at the autonomous region level, so that the environmental protection measures for the projects can withstand inspections by various parties, thereby ensuring a proper environmental foundation for the smooth operation of these projects. Finally, it should be emphasized that today, Xinjiang enjoys prosperity and stability in its society, with steady economic development. The business environment in the region continues to improve. Enterprises should seize this opportunity and make use of the policy advantages offered for economic development in Xinjiang, work hard to overcome the difficulties and challenges associated with their projects, accelerate the progress of project implementation, and bring these projects online as soon as possible. It is reported that from November 8 to 9, 2020, Zhang Jingquan, a member of the Party Committee, vice president of Yitai Group Company and chairman of its joint-stock company; Zhang Lifeng, secretary of the Discipline Inspection Commission of Yitai Group Company and chairman of Yitai Finance Co., Ltd.; and Wang Chunying, deputy chief economist of Yitai Group Company and general manager of the Human Resources and Planning Department, visited Yitai Ili Energy Co., Ltd. to conduct inspections and provide guidance. Zhang Jingquan, vice president of Yitai Group, said that although the Ili project has not yet been launched due to various objective factors such as the lack of available coal resources, difficulties in securing project financing, and the COVID-19 pandemic, the group company remains committed to making every effort to advance the relevant preparations in order to resume work on the project as soon as possible. At present, Yitai Group is actively engaging with various domestic financial institutions to arrange project loans, and is also in discussions with central state-owned enterprises with which it has long-term cooperative relationships, in an effort to resolve financing issues through various channels such as equity financing and BT model partnerships. It is hoped that all employees of the company will fully understand the difficulties faced by the group company at present, maintain firm confidence, unify their thinking, work together to overcome these challenges, and strive to make breakthrough progress in the projects by next year. Zhang Lifeng, secretary of the Discipline Inspection Commission of Yitai Group, stated that the group company has remained committed to investing in and developing projects in Ili, with its determination unchanged, and called on everyone to maintain firm confidence. Currently, **financial policies tend to support the development of the real economy, which is great news for the Yili project. Next, the group company will strengthen its capital management, gradually utilizing channels such as the capital and bond markets to ensure proper funding for the entire group, thereby laying a solid foundation for the transformation and upgrading of the group’s industrial structure. Wang Chunying, deputy chief economist of Yitai Group, said that in the face of the ongoing downturn in the economic situation both domestically and internationally, the group company continues to work on improving corporate management and takes various measures to reduce costs and increase efficiency. Through these efforts, it aims to promote the long-term development of its coal chemical business sector. In terms of compensation, the group company uses performance-based incentive mechanisms such as profit sharing and special awards to continuously improve employees’ salaries and wages. At the same time, it keeps enhancing benefits such as social insurance, housing fund, and commercial insurance, providing comprehensive protection for all employees. It is reported that the company has planned two coal-to-oil projects under construction in Xinjiang, namely the 1 million tons per year coal-to-oil demonstration project carried out by Yitai Ili Energy Co., Ltd. (hereinafter referred to as “Ili Energy”), and the 2 million tons per year project in Ganquanbao, Xinjiang. A coal-to-oil project is under planning in Inner Mongolia, namely the 2 million tons per year demonstration project for coal indirect liquefaction by Inner Mongolia Yitai Coal-to-Oil Co., Ltd. (hereinafter referred to as “Yitai Coal-to-Oil”). Taking into account the macroeconomic and industry trends, and with the aim of protecting the interests of all shareholders, the company will focus its efforts on developing the Yili Energy 1 million tons per year coal-to-oil demonstration project and the Yitai Coal-to-Oil 2 million tons per year coal indirect liquefaction demonstration project, while suspending the development of the Gancuanbao 2 million tons project in Xinjiang Energy. On January 29, 2021, Inner Mongolia Yitai Coal Co., Ltd. held the sixth meeting of its eighth board of directors, during which the proposal regarding the suspension of the development of Yitai Gansuquanbao 2000,000 tons per year coal-to-oil demonstration project by Yitai Xinjiang Energy Co., Ltd. was reviewed and approved. The Yitai Ili Energy 1 million tons per year coal-to-oil demonstration project is located in the Yitai Ili Industrial Park, Chabuchar Xibe Autonomous County, Ili Kazak Autonomous Prefecture, Xinjiang Uygur Autonomous Region. Its production capacity is 1.0152 million tons per year of products such as diesel, naphtha, and liquefied petroleum gas; meanwhile, by-products such as mixed alcohols and sulfur are also produced. The total investment for the project is 16.27 billion yuan, of which the capital contribution amounts to 4.85 billion yuan, accounting for 30% of the total investment. This project is a **coal-to-oil demonstration project** that primarily undertakes demonstration tasks such as the industrialization of the 3,000-ton-class multi-nozzle opposed water-coal slurry gasification technology, the industrial application of improved Fischer-Tropsch synthesis reactors and new-generation catalysts, as well as the mechanical evaporation and crystallization treatment of concentrated brine.