The following is an excerpt from our report 'Thirsty Coal 2', which can be read in full here.

The Shenhua Group is China's largest coal conglomerate, producing 460 million tons of raw coal every year. Half of this total comes from the largest integrated coal field, Shendong, with proven reserves which provide one quarter of the national total. It is one of the world's eight largest coal fields and contains both the Shendong and Shaanbei coal mines. Shenhua Group’s Ordos Coal- to-Liquid Demonstration Project is located in the Shendong coal field.

From March to July 2013, Greenpeace visited Haolebaoji eleven times to analyse the impact on the environment of Shenhua's over-extraction of groundwater. We investigated two aspects of Shenhua’s coal chemical demonstration project: the demand for and extraction of water, and the quantity and disposal of industrial wastewater, and collected evidence of practices that are in clear violation of Chinese laws governing access to water resources and the discharge of industrial wastewater.

We found the following:

Shenhua has drilled 22 wells, each over 300 metres deep, which extract as much as 14.4 million tonnes of water per year. This depletion has caused the groundwater levels to drop by up to 100 metres. Since 2006, every single artesian well in the region has run dry and most wells less than 30 metres deep have been abandoned. Now, local people must dig new wells at least 100 metres deep to access water.


Some villagers do not have their own deep wells and have no choice but to go to those that do. Most wells are around 150 meters deep. © Greenpeace / Qiu Bo

There has been a large decrease in the surface area of Subeinaoer Lake, the main lake in the region. Satellite images show that by 2011, the lake had decreased by 1.27 square kilometres, or 62%, when compared with images from 2004 (before Shenhua began extracting water for its Coal-to-Liquid Project in Ordos).


Recent rain has filled Subeinaoer Lake a few more centimeters. Locals say many different types of birds used to come to the lake, but now that is has become so dry there are very few. © Greenpeace / Qiu Bo

There has been a decline in surface vegetation. A great deal of the vegetation planted by local residents in the region, such as salt cedar, sagebrush and yang chai (羊 柴) is dying. Poplar forests, planted to block wind and sand, are failing.


Hu Shan pulls up a dead yang chai bush near Shenhua's number eight well. Yang chai can be eaten by both cattle and sheep and holds sandy soil in place. But now all the yang chai in the area have died. © Greenpeace / Qiu Bo

Natural and planted vegetation covering sand dunes is also dying, causing sand dunes to expand and become mobile, leading to increasing desertification of the grasslands. In the past, low lying areas, riverbanks and lakes were relatively plentiful in water; but now sand has settled into rivers and lakes, and sand dunes have spread.


Desertification from falling ground water levels has caused the grasslands to disappear and pine forests on nearby hillsides to die. © Greenpeace / Qiu Bo

It has become very difficult for farmers and herders to obtain water. The water that 2,402 households (5,752 people) depend on for survival has been lost, with 80,000 hectares of land affected by severe water shortage. Water needed for irrigation has become scarce and land productivity has declined with abandoned fields everywhere. The herds that can be supported in grazing areas have declined dramatically, with fewer large animals, especially cows and horses. The number of sheep has also fallen. Many petitions about water extraction have been submitted by local farmers and herders.


Since the grass has died, villagers now have to feed their sheep corn. © Greenpeace / Qiu Bo

Head here to view our entire 'Thirsty Coal 2' feature, including the statement Shenhua has delivered in response to our accusations.