WVU instrumental in US-China joint venture

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October 19, 2004 –

Morgantown, W.Va. – With 1.3 billion people, China can be a huge new market for the U.S. energy industry. Given the country’s large coal reserves, Chinese energy experts predict that nearly 85% of the growing energy needs will be met by coal-based technologies within the next decade. “With China’s acceptance into the World Trade Organization three years ago, opportunities abound for the U.S. energy industry,” said Bruce Blakeman of the Department of Commerce at the 3 rd US-China Clean Energy Workshop, held October 18-19 at the West Virginia University National Research Center for Coal and Energy.

As the Special Counsel to the U.S. Secretary of Commerce, Blakeman represents the Secretary of Commerce Donald Evans and International Trade Administration Under Secretary Grant Aldonas in China on economic and trade affairs. His areas of responsibility are to monitor China WTO ascension, assess Chinese market access policy development, and develop strategies for U.S. company export promotion to China.

“The Chinese are very interested in adopting clean, efficient technologies for coal,” said Judd Swift, the Department of Energy’s deputy assistant secretary for international affairs in the Office of Fossil Energy.

DOE currently is implementing President’s Bush’s $2 billion, 10-year initiative to develop an improved generation of coal-based electric power and pollution control technologies that will be environmentally superior to the technologies used in today’s power plants throughout the world.

“The U.S. Department of Energy and Department of Commerce offer a number of programs to help U.S. industry do business in China,” he said.

One of the earliest energy-related joint ventures is Asian American Coal, Inc. (AACI). Formed in 1994, the venture includes Evan Energy Co., Marshall Miller & Associates, Resource Capital Fund L.P., Peter Flour, Morgan Massey, and Phillips Machine LLC.

AACI President Steve Zou, who earned his Ph.D. at West Virginia University, used his contacts in West Virginia University’s Department of Geology and Geography to find the right partners for the venture. “Dr. Alan Donaldson introduced me to one of his former students, Marshall Miller, who is president of Marshall Miller and Associates of Bluefield, Va. Marshall brought in Morgan Massey, former president of Massey Coal. Mr. Massey contacted Peter Flour and we were able to put together the capital and expertise to create this company,” Zou explained.

Phillips Machine of Beckley, W.Va. will sell nearly $2 million mining equipment for the mine in the Shanxi Province in China. When the mine reaches full production next year, it will produce more than five million tons of coal per year.

“Our goal is to use the safest, most efficient mining techniques found here in the U.S. in our operations in China,” said Scott Keim, of Marshall Miller & Associates.

Safety is recognized by the Chinese as a major problem in the mining industry. “In China, the government has established the State Administration of Coal Mine Safety Supervision,” said Yuhong Hu, deputy director general for the National Center for International Exchange and Cooperation of the China National Coal Association. “Coal mines can be inspected directly by the government where in other industries in China, the government only supervises safety inspections,” Hu explained.

“The government can levy very strict punishment for violators, including closing a mine,” she said. The government is taking steps to better educate workers and mine owners about safe mining practices, she added.