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Peabody signs two agreements to develop clean coal in China

Oilfield Technology,

Peabody Energy and Yankuang Group Co. Ltd will develop the planned Wucaiwan Energy Center in the Zhundong region of Xinjiang in northwestern China. The centre would include development of a 20 million tpa opencast coal mine, which will provide the fuel for a 2000 MW supercritical power plant and a substitute natural gas (SNG) facility producing 4 billion m3/year of gas.

The agreement demonstrates growing cooperation on clean energy and carbon initiatives between China and the US. The location has good access to the Xinjiang electricity transmission corridor, as well as a new rail line under development that will serve electricity customers and other industrial users in Central and Eastern China.

In the coming months, the parties will evaluate development of the mine in the Wucaiwan reserve, which is estimated at 4.6 billion t. Project development will also require a customary permitting and regulatory approval process.

China is expected to increase its power capacity by 80 GW this year alone, representing several hundred million tons of additional coal use. China also represents nearly half of global steel production and consumes the majority of the world's met coal.

In other news, China Huaneng Group, Peabody and Calera Corp. will development of a green coal energy campus in the Xilinguole region of Inner Mongolia. The energy project will include a 1200 MW supercritical power plant that will capture a portion of CO2 and convert it into green building materials, advancing carbon capture technology.

The plant will be fired by a 12 million tpa surface mine operated by Peabody. Huaneng, the largest generator in China and second largest in the world, will serve as the power plant operator, while Calera brings its proprietary technology to convert CO2 into solid carbonates that can be used as building materials. Every ton of captured CO2 is expected to produce two tons of cement construction material. The planned location has good access to serve electricity customers and industrial users in the Xilinguole region.

By 2025, China is expected to have more than 200 cities with populations greater than 1 million people, versus just 35 such cities today. China also is the world's largest and fastest-growing coal market, using coal to fuel approximately 80% of its electricity. Its coal demand is expected to increase by 1 billion t in less than five years, bringing use to 4.3 billion tpa, according to the China National Energy Administration. Globally, coal has been the fastest-growing fuel the past decade.

In the coming months, the parties will evaluate engineering plans. Project development also will require a customary permitting and regulatory approval process. The power plant is expected to operate at least 30 years.

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