of the big beneficiaries of China's well-publicised drive to woo
African nations could be Sasol, the South African petrochemicals giant
that has an ambitious project to build two coal-to-liquid (CTL) plants
in China.

The total investment could top $10bn although the plants are unlikely to start producing the synthetic fuel before 2012.

The two projects — one in Yulin city in Shaanxi province, the other
in the Ningxia Hui autonomous region of northwestern China — could reduce China's oil imports by at least 55m barrels a year according to South Africa's Business Report.

China will import over 1bn barrels of oil this year so the country
is keen to find ways to reduce its dependence on imported energy. CTL
has the twin advantages that it exploits China's own vast coal reserves
and it is cleaner than simply burning coal, or so proponents claim.

Indeed, analysts predict that CTL has the potential to substitute up to half of China's oil imports.

The only disadvantage is that CTL is a relatively new technology
although the process was developed fifty years ago. In South Africa,
Sasol operates the world's only commercial CTL plant which
manufacturers 150,000 barrels of synthetic fuels a day.

In June of this year ,Sasol signed an agreement
on feasibility research into the two plants with Shenhua Group, China's
largest coal producer. It is now patiently waiting for China to give
fresh impetus to the mammoth project, which provide a showcase for its
CTL technology.

At last week's China-Africa forum — the largest ever summit held in
China — trade was a key focus although Sasol's project was apparently
not discussed.

Trade between China and Africa is expected to exceed $50bn this
year, a near-tenfold increase since 1995, and one of the main themes of
the forum was ensuring that number keeps continues to grow.

Western nations are watching nervously to see whether the promises
made at the forum words translate into deeper trade ties between China
and Africa.

More on the achievements of the Sino-African summit in this Financial Times story. Background on China's changing relationship with Africa in this Mail & Guardian story.

EngagingChina wrote previously about Sasol and “clean coal” technologies here.

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