<br /> <br /> The Hetaoyu mine and Xinzhuang mine, both located in coal-rich Qingyang City of Gansu Province in northwestern China, are still under construction five years after a ceremonial groundbreaking. They were originally planned to start production in 2012.<br /> <br /> These two mines have a combined capacity of 20 million tonnes annually, with Hetaoyu mine at 12 million tonnes and Xinzhuang mine 8 million tonnes per annum along with a 8 million tonnes preparation plant.<br /> <br /> Huaneng blamed the setback on unexpected geological conditions in the underground mines. Excessive underground water forced the company to change to higher-cost vertical shaft mining from slope mining, the report said, citing one unnamed company insider.<br /> <br /> However, industry insiders pointed out falling coal prices were another main cause for the delay in construction. Huaneng had sought to own coal mines as a means to reduce input costs for its thermal power business, but it doesn’t make sense to hasten construction under the current low prices, industry insiders added.<br /> <br /> Many miners have been forced to curb or suspend output, as coal prices have dropped below the breakeven points. As of July 15, the Fenwei/Platts CCI1 Index for domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port fell to 483.50 yuan/t FOB, inclusive of VAT, down 22% from the beginning of the year. The last time the price was on this level was in December 2007.<br /> <br /> The group however, may still speed up the pace of construction, given the pressure from top provincial officials of Gansu, which have made several high-profile visits to the construction sites since 2012, sources said.<br /> <br /> <p> Since entering the coal industry in 2006, Huaneng has acquired huge coal reserves over the years, especially during the government-led mines consolidation campaign in 2008. The group had planned to get over 40% of its coal demand from self-owned coal mines by 2015. </p> <p style="text-align:center;"> <img src="/upfiles/news/image/20140722/20140722152027_8027.jpg" alt="" /> </p>