Inner Mongolia Yitai Coal Liquefaction Co., Ltd. said that China's first indirect coal liquefaction production line in which it has a controlling stake is undergoing equipment testing and will officially start production in November this year.

    Located in Ordos of Inner Mongolia Autonomous Region, the project has a designed annual production capacity of 480,000 tons, including 160,000 tons during the first phase. Investment in the project, kicked off in May 2005, will total 4.975 billion yuan, including 2.176 billion yuan for the first phase.

    Jiang Jiansheng, deputy general manager of Yitai Coal Liquefaction, said the company is able to make profit in coal liquefaction once the oil price exceeds 45 US dollars/bbl. He estimates that every 4.2 tons of coal can be liquefied into one ton of oil.

    Ordos has verified coal reserves of 150 billion tons. Its raw coal production and sales approached 200 million tons in 2007.

    Ordos Mayor Du Zi said two coal liquefaction projects will come on stream in the city this year.