A multi-billion yuan port will be built near Tangshan, Hebei Province, to meet rising demand for shipping coal from north China to aouth China, and to expand capacity for iron ore and crude oil imports.

The Caofeidian Port on Bohai Bay is designed to handle 200 million tons of coal per year once construction work is completed and it reaches full operational capacity in five years.

Investors in the port include the State Development and Investment Corporation (SDIC) - the country's leading holding company for investment - the Hebei Provincial Construction Investment Company, the Qinhuangdao Port Group Company Ltd, the Guangdong Zhujiang Investment Company Ltd and the Tangshan City Investment Company.

The SDIC holds 51 percent of the shares in the SDIC Caofeidian Port Company Ltd, which will take responsibility for the development and construction of the port.

The total investment amounts to 7.71 billion yuan (US$932.88 million). The port will be equipped with 16 deep-water berths capable of receiving 250,000 ton ships.

An official from the SDIC told China Daily in an exclusive interview yesterday that a contract has been signed in Beijing by the investors.

The port will ease the bottleneck in coal transportation from inland areas of North China to East and South China, and satisfy demand from the booming coastal areas of East and South China.

This year, the annual coal transportation capacity of the Datong-Qinhuangdao Railway will be increased to 200 million tons. However, the Qinhuangdao Port in Hebei Province, the largest coal port in North China, can only handle 150 million tons. A branch line linking the Datong-Qinhuangdao Railway and Caofeidian will be constructed to handle the surplus.

The Caofeidian Port is initially expected to have an annual capacity of 50 million tons of coal, but will eventually reach the target of 200 million tons.

An iron and steel complex is also scheduled to be built at Caofeidian. Beijing-based Shougang Group, one of the largest iron and steel producers in China, will relocate most of its existing production facilities to Caofeidian and phase out its smelting operations in Beijing by the end of 2010.

The Shougang Group imports iron ore from abroad to meet its production needs.

The new port at Caifeidian, Tangshan City, is 38 miles from Tianjin Port to the west and 92 miles from Qinhuangdao Port to the northeast.

Located about 225 kilometres from Beijing, Caifeidian has good rail links and natural deep-water channels suitable for large ships.

Four major railways run through the area, while the depth of water in the port area ranges from 25 meters to 36 meters.

(China Daily April 29, 2005)