Announcement of China to Improve Coal Mining Operations with World Bank Loan on March 18, 1985

FOR IMMEDIATE RELEASE ITRNAT World Bank INTERNATIONAL BAN rol MNT 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. ECON u N0D DOI BANK NEWS RELEASE NO. 85/34 Contact: P.B. Sison March 18, 1985 (202) 477-3573 CHINA TO IMPROVE COAL MINING OPERATIONS WITH WORLD BANK LOAN China will use a World Bank loan of $126 million for the first of a series of large-scale, fully mechanized coal mining operations. The project is estimated to cost $357 million and will make an important contribution to achieving the government's aim of increasing annual production to at least 1,200 million tons by the year 2000. China's coal reserves of 640 billion tons rank first in the world. The coal industry in China is a major employer and provides about 70 percent of the country's commercial energy consumption, a percentage which is unequalled worldwide. The project includes the development of an underground mine with a capacity of 4.5 million tons a year, and a coal preparation plant, with a capacity of 2 million tons a year. A railway spur line, an electrical substation, water supply lines, workshops, warehouses, offices, a hospital, and schools will also be built. Major mining works include the sinking of three vertical shafts and the building of 48 kilometers of underground roadways. Six coalfaces, using highly mechanized methods of extraction, will also be developed. Technical assistance and training will be provided to Luan Coal Industrial Company (CIC), the executing agency for the project, and to the construction teams. The aim is to improve management and engineering capabilities and the company's techniques for scheduling and monitoring projects, as well as to reduce the time and cost of construction by improving cost controls. A new training center will be established and integrated with the Luan CIC's existing training facilities. The center will focus on the application of modern mining techniques and will train operating, technical, and managerial staff. The technical assistance and training will include strong mine safety and environmental measures. Besides the World Bank loan, other financing for the project will be provided by the Government of China ($220.5 million), local banks ($8.2 million), and grants from the Federal Republic of Germany ($1.9 million), and the United Nations Development Programme ($0.4 million). The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 9.29 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.