China health chiefs shut $3.3 billion coal-to-chemicals plant

BEIJING (AFP) - Chinese authorities have halted production at a huge US$2.7 billion (S$ 3.3 billion) coal-to-chemicals plant for breaching environmental regulations, media said Wednesday as pollution levels rose again in Beijing.

Environmental officials shut down the factory in Inner Mongolia on Tuesday, the reports said.

The plant has been feted as a "milestone project" by its owner, the energy giant Shenhua Group, for pioneering the conversion of coal into other products.

The news came after acrid smog blanketed large swathes of China last week, prompting public anger and promises by senior officials to try to address the problem.

The Shenhua Baotou project will not be allowed to reopen until it meets standards set by the Ministry of Environmental Protection, the National Business Daily said.

Officials found the plant breached general green guidelines, including starting production in May 2010 before environmental protection measures were in place, the newspaper said.

The firm was also ordered to pay a 100,000 yuan (S$20,000) fine, the state-run China News Service reported. No one from the company could immediately be reached for comment.

Environmental concerns - particularly over the use of coal - have been pushed to the top of the agenda after much of the country was covered with a blanket of smog earlier this month.

The air quality index (AQI) from the Beijing Municipal Environmental Monitoring Centre reached 993 during the worst of the pollution, almost 40 times the World Health Organisation's recommended safe limit.

Chinese monitoring services put the capital's AQI above 300, or "severely polluted" on Wednesday, while the US embassy reading was above 400 and "hazardous" for much of the day. Travel was disrupted, with 24 flights cancelled and eight delayed, according to Beijing Airport.

The Baotou project - in mineral-rich northern areas - was identified on the website of Shenhua, China's largest coal company, as one of its 10 key projects. It is expected to earn 1.2 billion yuan annually for the group once it becomes fully operational.

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