Greenpeace accuses Shenhua of 'drastic' groundwater drop

Environmental group Greenpeace yesterday fired its first open challenge to a powerful state-owned firm, accusing the nation's largest coal producer of causing "drastic drops" in groundwater near one of its projects and of illegally discharging toxic wastewater.

A Greenpeace report said that a coal-to-liquid project operated by Shenhua Group near Ordos city in Inner Mongolia had drained 50 million tonnes of groundwater from the water-scarce Haolebaoji region since 2006, shrinking the nearby Subeinaoer lake by 62 per cent.

The report, released after a five-month field investigation, comes as the mainland is on a fast track to expand the water-intensive coal-to-chemicals industry. At least 13 such projects were approved by the National Development and Reform Commission in the first half of this year with more than 100 others waiting for approval, Greenpeace East Asia campaigner Deng Ping said.

"This project has been hailed as an industry model with its self-claimed 'low water consuming' and 'zero emission' technologies," Deng said. "And if this groundwater draining model is going to be copied by other projects, it would lead to rampant eco-disasters."

Greenpeace said it found the project was discharging wastewater containing high concentrations of toxic chemicals without proper treatment. The water problems have led to rising discontent among local herders, whose lives have been disrupted since the company started to build 22 deep wells in 2003 and began extracting water in 2006.

Shenhua's coal-to-liquid project has a production capacity of 1.08 million tonnes a year, with plans to expand to five million tonnes. Greenpeace said the project's water use would triple to 41 million tonnes by 2017.