(Bloomberg) -- Mid-tier Chinese coal miner Shanxi Coal International Energy Group is planning a significant investment in the competing business of making high-tech solar power cells.
The state-owned firm will lead a joint venture to build a 3-gigawatt solar manufacturing plant for 3.19 billion yuan ($461 million), according to a statement on Friday. It's the first phase of a project that will grow to 10 gigawatts -- the equivalent of the generating power of 10 nuclear power plants -- producing high-efficiency cells through so-called heterojunction technology.
While unusual, Shanxi Coal's foray into rival territory isn't a first. Jinneng Group, a provincial coal peer, also has a solar cell and panel manufacturing business. Shaanxi Coal Industry Co., meanwhile, holds a 3.88% stake in the world's biggest solar wafer-maker LONGi Green Energy Technology Co.
China is both the world's biggest coal and solar producer. Despite its dirty credentials and role in global warming, such is coal's importance to cheap power and employment in the nation it won't be fading away anytime soon, even as renewable energy takes bites out of its dominant share of the power generation pie.
According to Shanxi Coal, the rationale for its investment is to help with the province's energy transition and meet the need for state firms to get behind strategic emerging industries.
The company will own a 88.5% stake in the venture, Shanxi Coal International Photovoltaic Power Technology Co. The rest will be held by Huzhou Junhua Siyue Equity Investment Partnership and Ningbo Qixian Enterprise Management Consulting Co.
©2020 Bloomberg L.P.
With assistance from Bloomberg
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