BEIJING - A major Chinese state-owned coal producer has caused "drastic drops" in groundwater near one of its projects, the environmental group Greenpeace said in a report Tuesday.
Lakes have shrunk, wells have dried and sand dunes are spreading near a plant in Inner Mongolia run by coal conglomerate Shenhua Group, the organisation said.
It called the project a "classic example of the unchecked expansion of coal-reliant industries that is in growing conflict with China's water resources".
China - the world's biggest energy consumer - relies heavily on coal to power its economy, but is facing popular pressure to balance growth with tackling pollution.
The plant in Ordos, the capital of Inner Mongolia, a major coal-producing region, uses coal to make chemicals.
To enable production it extracts water from the Haolebaoji area 100 kilometres (60 miles) away, Greenpeace said, citing 11 visits to the area over five months this year.
A lake called Subeinaoer has dropped in surface area by 62 per cent from 2004 to 2011, it said, and residents must now dig wells at least 100 metres (330 feet) deep, while farmers and herders have complained of disappearing grazing.
Sand dunes have spread as land covered by vegetation has shrunk, the campaign group added.