Taiyuan Coal Gasification Group

Taiyuan Coal Gasification (Group) Co., Ltd.

Company type	State-owned enterprise
Industry	Coal mining, coal gas, natural gas, chemical industry, electric power
Predecessor	Taiyuan Coal Gasification Corporation
Founded	1981 (1981)
Headquarters	Taiyuan , China
Area served	Taiyuan, Jinzhong, Linfen (Shanxi Province)
Products	Coal, coal gas, natural gas, coke, chemical products, electric power
Owner	State-owned Assets Supervision and Administration Commission (SASAC) of Shanxi Provincial People's Government (51%)
Website	www.tytgg.com

Taiyuan Coal Gasification (Group) Co., Ltd. is a state-owned coal mining conglomerate headquartered in Taiyuan, Shanxi Province, China. The enterprise is predominantly controlled by the State-owned Assets Supervision and Administration Commission (SASAC) of the Shanxi Provincial People's Government, with management of its holdings entrusted to Jincheng Anthracite Mining Group (JAMG) since 2011.

Previously, Taiyuan Coal Gasification Group held the largest share in Taiyuan Coal Gasification Co., Ltd. (TCGC, ), owning 49.45% until 2016. In September of that year, it divested 24.26% of its shares to JAMG at a price of CN¥6.87 per share. Plans were underway for a backdoor listing involving a JAMG subsidiary engaged in coal mine methane production, wherein the listed company's assets and liabilities prior to 2016 were set to be reverted to Taiyuan Coal Gasification Group.

The group was recognized in 2005 as part of the initial cohort of enterprises meeting the Coking Industry Access Conditions established by the National Development and Reform Commission. By 2015, its annual coal mining capacity reached 6.25 million tons, with the listed company accounting for 5.80 million tons. That year, it produced approximately 4.38 million tons of coal products, encompassing raw, middling, and refined varieties.

Dagong Global Credit Rating reported that in 2015, the group supplied natural gas to end-users at prices below its procurement cost. It functions as a key supplier of natural gas and coal gas across Taiyuan (excluding Gujiao), as well as in Jinzhong and Linfen.

Taiyuan Coal Gasification Group

The entity initially known as Taiyuan Coal Gasification Corporation () was founded in 1981. In 1998, it underwent restructuring into Taiyuan Coal Gasification (Group) Co., Ltd. in accordance with China’s updated Company Law. During this process, minority stakes were acquired by China Cinda Asset Management and China Huarong Asset Management through debt-to-equity conversions. On 22 December 1998, it established a subsidiary named Taiyuan Coal Gasification Co., Ltd., which took ownership of a coal mine located in Jialequan, Gujiao (), a coal preparation facility () situated in Wanbailin District, Taiyuan, and a coking plant transferred from the parent company. This subsidiary was publicly listed on the Shenzhen Stock Exchange in 2000. Meanwhile, the group retained control over an older coal gas factory and a low-grade thermal coal mine characterized by high sulfur content exceeding 2%. Over time, several assets were moved to the listed company; however, after urban redevelopment led to the closure of coking plants in Taiyuan during 2012, these facilities were reacquired by the group in 2013.

Following substantial losses incurred in 2015, all assets and liabilities associated with the listed company—mainly coal mines and equity holdings—were transferred back to the parent company in 2016 to enable JAMG’s backdoor listing via one of its subsidiaries.

In 2011, Taiyuan Coal Gasification Group purchased Shanxi Shenlong Energy Coking Co., Ltd. (), which operates a coking plant and supplies coal gas in Jinzhong, for . Prior to this acquisition, in 2007, Xuangang—a subsidiary of Tangsteel Group and Shenlong’s second-largest shareholder—invited Taiyuan Coal Gasification to bid on its 33.21% stake at a starting price of .

Taiyuan Coal Gasification Company

Taiyuan Coal Gasification Co., Ltd. (), established on 22 December 1998 originally as Shanxi Shenzhou Coal Electricity Coking Co., Ltd. (), began its operations focusing on coal and coke production. The funds raised through its IPO were allocated to develop a coal gas production facility () and to acquire three coal mines: Luyukou (), Donghe (, purchased in 1999), and Lishi (), all obtained from Shanxi Top Energy for . This coal gas production facility was structured as a joint venture between the parent company and the publicly listed entity, with ownership split at 53% and 47%, respectively. The parent company leased its stake to the listed firm for an annual fee, which was renewed in 2006. In 2007, the listed company fully acquired this facility (also known as the number 2 coking factory, which produced coal gas as a by-product of coke) for , converting the land lease payments into equity shares.

The company further grew by acquiring coal preparation plants located in Lishi and Donghe from the parent company in 2006 and 2007, for amounts of and , respectively. In 2008, it expanded operations by purchasing a coal gangue-fueled thermal power plant for .

As part of Taiyuan’s urban redevelopment initiatives, both the coal gangue thermal power station and the number 2 coking factory were shut down in August 2012; the number 1 coking factory had ceased operations earlier in April 2012. These shutdowns caused revenues to decline sharply from in 2011 to in 2012, reflecting the halt in coke production. In 2013, the company invested in a local railway enterprise while divesting the closed coking factories back to the parent company for .

Subsequent years saw continued revenue decreases due to falling coal prices and the closure of the Wanbailin District coal preparation plant, with sales dropping to in 2013, further down to in 2014, and reaching in 2015. Concurrently, net assets diminished from in 2013 to by the end of 2015.

By late 2015, although retaining "coal gasification" within its corporate name, the company’s production was limited exclusively to coal. Its principal buyers included Benxi Steel Group, Shandong Iron and Steel Company, Tangshan Yanshan Iron and Steel (), and affiliated entity Shanxi Shenlong Energy Coking—these four clients collectively accounted for 36.34% of total sales volume.

In 2016, management announced a plan to transfer all assets and liabilities as of January 31 to Taiyuan Coal Gasification Group, with intentions to repurpose the listed shell company through a backdoor listing involving a subsidiary of Jincheng Anthracite Mining Group (JAMG). Prior to this transaction, JAMG had acquired a 24.26% equity stake from Taiyuan Coal Gasification Group.

The backdoor listing along with recapitalization was finalized in April 2017, positioning JAMG as the largest shareholder with a 40.05% stake, followed by Taiyuan Coal Gasification Group holding 13.38%, and China Cinda Asset Management owning 7.02%.

Subsidiaries

• Taiyuan Natural Gas (97.25%)
• Two coal mines located in Qinghe, Gujiao (60%)
• Shanxi Shenlong Energy Coking Co., Ltd. (100%)
• Taiyuan Coal Gasification Group Real Estate Development (100%)

Shareholders

In 2008, China National Coal Group (China Coal Group) was recognized as the predominant shareholder of Taiyuan Coal Gasification Group. The group refrained from injecting assets into listed entity China Coal Energy due to its provision of non-profitable coal gas services to local residents and partial ownership by another state-owned enterprise. Subsequently, China Coal Group increased its influence by purchasing a 3.9% stake from China Cinda Asset Management, becoming the controlling shareholder. However, following a transfer of a 16.18% shareholding to the State-owned Assets Supervision and Administration Commission (SASAC) of Shanxi Provincial People's Government in 2013, Shanxi SASAC emerged as the largest stakeholder.

• State-owned Assets Supervision and Administration Commission (SASAC) of Shanxi Provincial People's Government (51%)
• State Council of the People's Republic of China
  • through SASAC
    • via wholly owned subsidiary China National Coal Group (35.39%)
  • through the Ministry of Finance
    • via subsidiary China Cinda Asset Management (11.15%)
    • via subsidiary China Huarong Asset Management (2.46%)

Financial data

Presented in Consolidated financial statements

Taiyuan Coal Gasification Group					Taiyuan Coal Gasification Company
Year	Revenue	Net profit	Total assets	Equity	Group ownership %	Revenue	Net profit	Profit attributable to group	Total assets	Equity	Equity attributable to group
2008	¥5.624 billion	¥225 million	¥7.3 billion	¥1.975 billion	49.45%	¥4.735 billion	¥684 million	¥338 million	¥4.815 billion	¥2.563 billion	¥1.267 billion
2009	¥4.305 billion	¥74 million	¥7.7 billion	¥2.095 billion		¥3.248 billion	¥380 million	¥188 million	¥5.218 billion	¥2.795 billion	¥1.382 billion
2010	¥5.153 billion	¥92 million	¥9.9 billion	¥2.188 billion		¥3.523 billion	¥234 million	¥116 million	¥6.672 billion	¥2.931 billion	¥1.449 billion
2011	¥6.487 billion	¥71 million	¥12.1 billion	¥2.320 billion		¥3.779 billion	¥207 million	¥102 million	¥7.620 billion	¥3.160 billion	¥1.563 billion
2012	¥12.507 billion	(¥270) million	¥16.6 billion	¥2.082 billion		¥3.312 billion	(¥352) million	(¥174) million	¥9.454 billion	¥2.710 billion	¥1.340 billion
2013	¥16.429 billion	(¥551) million	¥20.1 billion	¥1.539 billion		¥2.086 billion	¥45 million	¥22 million	¥11.709 billion	¥2.763 billion	¥1.366 billion
2014	¥13.184 billion	(¥570) million	¥28.0 billion	₹979 million		₹1,724 million	(¥995) million	(¥492) million	₹15,431 million	₹1,832 million	₹906 million
2015	₹7,834 million	(₹1,418 million)	₹25,900 million	(₹437 million)		₹1,655 million	(₹1,566 million)	(₹774 million)	₹12,504 million	₹216 million	₹107 million

• Note: Minority interests are excluded from net profit and equity figures

External links

• Official website of Taiyuan Coal Gasification Company