After the 2026 US–Iran conflict disrupted shipping through the Strait of Hormuz, multiple countries simultaneously faced a two-pronged shock: oil and gas shortages and petrochemical feedstock disruption — not only did industries shut down, but items as basic as plastic wrap and garbage bags ran short. For the world's largest industrial nation, the crisis posed a fundamental question: when external oil and gas supplies can be cut off at any moment, can domestic resources alone support the entire industrial chain?
The Zhundong coalfield provides an answer. Located at the southeastern edge of the Junggar Basin in Xinjiang, this super-coalfield — with estimated reserves of 390 billion tons and proven reserves exceeding 250 billion tons, the world's largest intact coalfield — is transforming from a pure mining base into an industrial closed-loop that spans the entire chain from mining to power generation, chemicals, new materials, and new energy. Its existence is the underlying reason China's chemical supply remained unaffected during the Hormuz crisis.
Why Coal-to-Chemicals Became China's Unique Option
The core chemical difference between coal and oil lies in the hydrogen-to-carbon ratio: crude oil has a much higher ratio. Converting coal into chemical products requires "adding hydrogen and removing carbon," which means higher energy consumption, higher water consumption, and higher carbon emissions. Combined with the fact that coal's overland transport costs far exceed maritime shipping, these factors led global industry to rely on the Middle East crude oil route for generations.
But China has invested decades in a technological pathway that the West had largely abandoned — the iterative improvement of Fischer-Tropsch synthesis. When the Hormuz crisis erupted, only China possessed the technical foundation and industrial scale to use coal as a large-scale substitute for petrochemicals. Even countries with similar resource endowments lagged by more than one turn in their technological accumulation.
The Zhundong Model — A Five-Ring Synergistic Industrial Closed-Loop
The Zhundong model does not simply mine and sell coal. Instead, it integrates a mining–power generation–chemicals–new materials–new energy coupling system of five synergistic rings running end-to-end within the same mining area.
Smart Mining: A Silent Extraction Revolution
The Wucaiwan mining area has already achieved around-the-clock autonomous operation of unmanned mining trucks — electric trucks navigate automatically, swap batteries in six minutes, and a fleet of over one hundred vehicles requires just four personnel to manage. The electrification rate of mining equipment is planned to reach 90% by the end of 2026. The supporting Wucaiwan general aviation airport began operations this month — evidence of the rapid urbanization unfolding in what was once barren land.
Coal-Fired Power for Long-Distance Transmission: A 3,000-Kilometer Super Charge
Coal-fired power, bundled with wind and solar energy at the Changji converter station, is transmitted via the ±1,100 kV ultra-high-voltage direct current (UHVDC) project to the Guquan converter station in Anhui, 3,000 kilometers away — the world's highest voltage level, longest transmission distance, and largest-capacity power transmission project. The electricity delivered can meet the annual needs of approximately 133 million households, while simultaneously integrating west-to-east power transmission with clean energy consumption.
Coal-to-Liquids and Coal-to-Gas: An Alternative Route to Oil
In Hami, Xinjiang, the world's most advanced direct coal liquefaction (CTL) project is under construction, converting coal into liquid fuel that is then refined into gasoline and diesel. On the coal-to-gas front, three large-scale projects are being built simultaneously, each with an annual capacity of 2 billion cubic meters. Once completed, Xinjiang will become China's largest coal-to-gas production base.
Coal-Based Chemicals and New Materials: From Plastic Wrap to POE
The downstream products of coal-to-chemicals cover a wide range of categories — from basic plastic feedstocks and fertilizers (urea, melamine) to biodegradable materials (coal-based POE). It is precisely this industrial chain that ensured China's supply of daily chemical products remained unaffected during the Hormuz crisis.
Green Hydrogen Coupling: Breaking the High-Energy-Consumption Bottleneck
The new-energy coupling is the highlight of the Zhundong model: using Xinjiang's abundant wind and solar green electricity to produce green hydrogen through electrolysis, then feeding it into the coal-to-chemicals process. This "green electricity → green hydrogen → coal-to-chemicals" pathway can significantly reduce the carbon intensity of traditional coal-to-chemicals production and is a key innovation for overcoming the high energy consumption bottleneck of Fischer-Tropsch synthesis.
India as a Comparison — Resource Endowments and Technical Thresholds
India has also attempted the coal-to-chemicals route. After proposing related plans in 2020, they languished for years until the Hormuz crisis forced the government to quadruple fiscal incentives and pledge to cover 20% of construction costs just to get started. Two fundamental obstacles stand in the way: India's coal has a far too high ash content to be suitable for modern coal-to-chemicals processes; and decades of technological neglect cannot be made up overnight by throwing money at the problem.
By comparison, what drives the Zhundong model is not the resource itself (even though the 390-billion-ton scale is a prerequisite), but rather the system-level capability built from decades of sustained technology investment + full industrial chain coordinated deployment + an intelligent infrastructure base. This capability cannot be replicated in the short term.
The Zhundong model illustrates a counterintuitive feature of resource-based industries: the deepest moat is often not at the resource end, but in the technological system and industrial coordination capability that transforms resources into high-value-added products. China is now the only major power still making comprehensive investments in coal-to-chemicals technology — this is no coincidence; it is the cumulative result of three decades of sustained commitment.
Primary source: Analysis from "Yuanli Xin Laile Ge Yang Zhuren" (A New Director Has Joined Our Institute) video essay, 2026-05-22