The open-pit Muli coalfield is located at the border of Tianjun County in Qinghai Haixi Mongolian Tibetan Autonomous Prefecture and Gangcha County in Haibei Tibetan Autonomous Prefecture, which are on a remote alpine plateau at an altitude of over 4,000m near Qilian Mountains in Qinghai Province in northwest China.  The Muli coalfield has an area of 112.6 km2 with 3.5 billion tonnes of identified coal reserves, more than 87% of Qinghai’s total. It consists of four opencast coal mine sites, namely Jiancang (建仓), Juhugeng (巨乎更), Duosuogongma (哆嗦贡马) and Hushan (弧山) coal mine. The former two had been extracting on a large scale since 2003 and the latter two were at the verge of opening as of 2014. 
The mining at Muli coalfield was undertaken by a handful of private firms, with China Kingho Energy Group mining at the largest scale. Kingho Group started to develop the Muli coalfield in 2003, with a total investment of CNY 295 million (USD 47.83 million) in the field.  Other than coal mines, the Group has built a complete coal industry chain in the area, with a coal chemical plant 90 miles away from the mines. Other firms involved included Qinghai Yihai Energy Co, Qinghai Coking Coal Group, Aokai Group, and China Railway Group.
Greenpeace published an investigation report on the illegal coal mining activities of the Muli coalfield in August 2014, based on evidence gathered on seven separate field trips to the remote region between 2012 and 2014 along with satellite images. The report disclosed in detail the pollution and damage to the ecological environment caused by the mining activities, which were also in violation of national and local regulations.
It was disclosed by the Greenpeace report that the two operational mines (Jiancang and Juhugeng) had resulted in the loss of 42.6 km2 of pristine meadows according to calculations based on satellite data by 2013.  The Greenpeace report indicates that “the opencast coal mining destroyed the alpine meadows connecting the glaciers on the mountains and the plateau, cutting off the channel for rainfall and melt water to feed into river. As a result, the water-holding capacity of the landscape is significantly compromised.” A representative of Greenpeace commented that “this huge coal mine dug into the birthplace of China’s mother river (Yellow River) is arguably the most shocking example of the threat coal poses to the country’s water supply”. 
According to Greenpeace, the coal development at Muli coal field violated a number of water protection laws and nature reserve regulations.  The Jiancang and Juhugeng mines are located in the Qilian Mountains National Ecological Functional Zone for Glacier and Water conservation, and the two new ones had their facilities set up in the Qinghai Qilian Mountains Sanheyuan Nature Reserve (Sanheyuan stands for the sources of three rivers, namely Datong, Shule and Buha River), which is supposedly an even stricter conservation area.  A Greenpeace representative mentioned that it is in violation of China’s nature reserve law to do any large-scale operations within nature reserves.
According to local herders living close to one of the coal mines, they were given tens of thousands of Chinese yuan in compensation when the mine took over the pastures. However, he would rather go back to the way they used to live as they could drink water from the river that flows down from the mountains, which got polluted and filthy due to coal mining activities. As an alternative, the mining company drilled wells to provide free drinking water to the locals. In addition to water pollution, the mining operations also led to significant noise pollution due to the blasting activities and polluted the air and pasture with coal ashes and dust.  The herders complained that their cattle/yak became weaker and the sheep developed cough after eating the grass polluted by the coal mining dust. When the blasting activities were intense, the local residents were afraid to stay inside their houses as it felt like earthquakes. According to a report by the local government of Muli Town, which had a population of 1,233 as of 2017, the town’s administration building suffered from land subsidence with many cracks and could not be used safely. 
Greenpeace found that the company and government have not systematically assessed the mining projects’ impact on the surrounding ecosystem before the project started. There was an environmental impact assessment (EIA) report for the coalfield in 2010, which found that two parts of the coalfield overlapped with a buffer area of the nature reserve. Despite the warning of the ministry of environmental protection to local authorities that they should ban mining and contain the coalfield’s scale, the mines went ahead with plans to expand. According to an expert that contributed to the EIA for the Muli coalfield, they pointed out the importance of permafrost for the maintenance of regional water resources and that open-pit mining is highly destructive of permafrost, yet their suggestion for changing open-pit mining to mine shafts which may lessen the damage to the permafrost was not implemented. 
Furthermore, it was reported that the Qinghai provincial government adjusted the boundaries of the Sanheyuan Nature Reserve in August 2013 and it was approved by the ministry of environmental protection, which led to a loss of almost 90,000 hectares, 5% of its total area, and thus left the two planned mining sites (Duosuogongma and Hushan coal mine) outside of its boundaries. The Qinghai Environmental Protection Office did not provide any reason for the change. Some comments by local officials gave a hint that there was the tension between environmental protection and economic development in Qinghai, since the province is one of the poorest considering provincial GDP as the benchmark, while the coal reserve in Muli could provide a major source of energy for the province’s “circular economy zone”.  According to the government work report by the Tianjun County where Muli Town belongs to, Tianjun County with only 30,000 population created more than CNY 3 billion GDP in 2010 when coal was still a rather profitable business. However, Muli Town suffered from the pollution of mining activities which resulted in the relocation of local residents to the center of the Tianjun County that is 150 km away and left Muli an empty town. A local Tibetan Buddism temple named Sang Qie Qi Ke Lang Temple was also closed and relocated. 
After the publication of the Greenpeace report, the environmental pollution issue of Muli coalfield received the attention of the central government. Representatives from the Qinghai provincial government inspected the Muli coalfield in person and provided guidance regarding ecological restoration and environmental governance. The “Implementation Plan for Comprehensive Improvement of Ecological Environment in Muli Mining Area" was reviewed and approved by the State Council. A total investment of CNY 2.05 billion (USD 0.29 billion) was drawn by different stakeholders in order to restore 19 coal ash dunes which covered an area of 0.65 million m2. It was reported from revisits to the Muli coalfield in 2018 and 2019 that the restoration has been successful. According to a company representative from Tianjun Yihai Energy Coal Operation Co Ltd (formerly known as Qinghai Yihai Energy Company), which is currently the only company operating at Muli coalfield, the company has invested more than CNY 1.1 billion (USD 0.16 billion) into solving the historical environmental issues. The company had worked with universities and research institutions to explore the optimal plantation for restoration and had restored 3.39 million m2 of area which was covered with coal ashes and the slopes resulted from coal extraction. The planted grass survival rate reached 90%. Wild animals including fox, donkey and wolf began to come back to the area. The local herders could also graze freely at the restored pastures in the mining area with better quality of grasses for their livestock such as yak.