The South African fuel company Sasol is in talks with the Chinese government over a US$2bn-US$4bn project to turn central China's vast coals reserves into petrol and other liquid fuels. The Financial Times said Sasol had not decided whether to invest directly in the project or to license its technology to the Chinese. However, chief executive Pieter Cox suggested that a licensing arrangement was more likely.
Central China is heavily dependent on coal for its energy needs because of the abundance of local supplies and the high cost of transporting oil from coastal refineries. However, coal burning has caused dangerously high levels of air pollution in many cities and the government is keen to switch to cleaner fuels such as natural gas.