Egypt's cabinet approves use of coal for power generation

(Adds government spokesman, background)

CAIRO, April 2 (Reuters) - Egypt's cabinet on Wednesday approved the use of coal for power generation after a fierce debate within the government over whether the highly pollutant fuel should be permitted for use by the energy-intensive cement industry.

Struggling to avoid public unrest over blackouts, the government has cut natural gas supplies to factories, prompting cement companies to renew their demand to use the fuel.

Companies including Lafarge and Suez Cement , which lists Italecementi as its main shareholder, have said the industry is operating at half capacity since the gas cuts began in January.

Government spokesman Hani Salah said no approval from the interim president was required since the decision was taken by the cabinet and is not a law.

Asked when companies would have the green light to use coal, he said that "most environmental studies" had already been conducted and predicted it would "not be very long" before plants would be using coal.

Suez Cement CEO Bruno Carre told Reuters last week one of the company's four plants could be ready to run on coal by September.

Environmentalists say the use of coal as energy would be catastrophic for Egypt, which already has one of the worst pollution levels in the world. (Reporting By Maggie Fick, editing by David Evans)

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