China Coal Energy Co Ltd has formed a joint venture, with registered capital expected to gradually increase to 54 billion yuan ($8.5 billion) from 1 billion yuan, to build and operate a coal transportation railway linking northwestern China with the rest of the country.

The move is part of plans by China, the world's top coal producer and consumer, to rapidly expand large coal mines and power plants in its arid northern and western provinces.

The around 1,800-kilometre railroad will connect key coal producing provinces including Inner Mongolia and Shaanxi with the centre of China and will involve a total investment of about 154 billion yuan ($24.2 billion), the country's second largest miner said in a filing with the Hong Kong bourse late on Thursday.

China Coal said it would own 10 percent of the Mengxi-Huazhong Railway Co, with China Railway Investment Corp holding 20 percent and another 14 Chinese partners taking the other 70 percent.

China intends to boost coal production in provinces including Inner Mongolia, Shanxi, Shaanxi and Ningxia, with output in those areas expected to reach 2.2 billion tonnes, or 56 percent of the country's forecast production of 3.9 billion tonnes, by 2015. (Reuters)