A coalfield with estimated reserves of 5 billion tons has been discovered in the Inner Mongolia Autonomous Region.

The coalfield is located in Xin Barag Left Banner, Hulunbuir League in east Inner Mongolia. Large machinery can be used for extraction, according to Inner Mongolia's department of land and resources.

Similar to other coalfields in Hunlunbuir, the new discovery will mainly produce brown coal, used in thermal power stations and in coal-to-chemical products, Liang Dunshi, an analyst with China Coal Transport and Distribution Association, said.

He said east Inner Mongolia is rich in brown coal, and west Inner Mongolia is rich in bituminite and anthracite coal.

"The discovery of this coalfield will help ease the demand for energy in Northeast China," he said.

Earlier in June, a coalfield with reserves of 20.5 billion tons was also discovered in Hunlunbuir.

The Inner Mongolia Autonomous Region has replaced its neighbor Shanxi Province as the country's largest coal reserve, the Ministry of Land and Resources said.

In June this year, the region had a reserve of 658.3 billion tons of coal. More geological surveys are being conducted in the region, the ministry said.

Last year, Inner Mongolia discovered five 10-billion-ton coalfields in Xilin Gol, and one in Baiyanhua of 6.4 billion tons.

The department of land and resources invested 2.78 billion yuan last year in geological exploration, doubling the investment between 2001 and 2005, on 170,000 sq km of land.

China's coal output is expected to be 2.6 billion tons in 2010, as it continues to be the nation's most important energy resource, according to the 11th Five-Year Plan (2006-10) for the coal industry published by the National Development and Reform Commission (NDRC).

Today, the nation has coal reserves of 1 trillion tons, ranking it third in the world. Shanxi and Shaanxi provinces and the Inner Mongolia and Ningxia Hui autonomous regions are the major sources for coal, accounting for 67 percent of the total reserves, the NDRC said.

China will develop six to eight coal-mining projects, with an output of 100 million tons, and eight to 10 companies capable of producing 50 million tons. By the end of the 2005, there were two firms with an annual output of 100 million tons and three with an output of 50 million tons.