China Shenhua Energy Co. Ltd., the country's largest coal producer, has planned a huge investment to build a coal processing project on China-Mongolia border to better use coal imports from the Republic of Mongolia.

The government of Wulate Middle Banner (County), north China's Inner Mongolia Autonomous Region, on Sunday confirmed that construction of Shenhua's project with a planned investment of 10 billion yuan (1.5 billion U.S. dollars) has started in Ganqimaodu Customs Processing Park.

Ganqimaodu Customs is China's major energy imports gateway with the Republic of Mongolia. It handled 7.71 million tonnes of coal imports last year. The imports of raw coal via the customs soared by 131.8 percent year-on-year in the first quarter to reach 1.6 million tonnes, according to the customs figures.

The Wulate Middle Banner commission of development of reform said Shenhua's project slated for the first phase production by 2012 would have a coal washing ability of 6 million tonnes a year, coking capacity of 2.4 million tonnes a year and an annual capacity of producing 4.8 million tonnes of methanol and 30,000 tonnes of tar, respectively.