China's coal shortfall

ONGOING coal mine consolidation in China over the next few years means production will not remotely match the country’s surging power demand, according to Chinese reports.
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A chinese coal miner, Guizhou Province in South West China

Blair Price

The communist government cemented China’s position as a net coal importer since the global financial crisis through its moves to overhaul safety in the industry and close down thousands of small mines.

To further cut down on independent operators, China plans to create a series of major coal producers that are better equipped to overhaul safety in the industry.

Under the five-year development plan, China is aiming for annual national coal production of 3.6-3.8 billion tonnes, up from the 3.2Bt produced in 2009, according to the China’s 21st Century Business Herald.

The China Coal Research Institute told the newspaper the government intends to establish 8-10 major coal companies with production of more than 100Mtpa and another 8-10 smaller players producing around 50Mtpa.

Even though China is starting to embrace greener forms of power generation, the country’s National Energy Administration will only limit standard coal consumption to 4.0-4.2Bt by 2015, according to Xinhua.

Based on these Chinese targets, the minimum annual shortfall of coal would be 200Mt by 2015 while the maximum case would be 600Mt.

The government intentions made available this week also suggest that sceptical views of a Chinese supply response to resurgent coal markets might be premature.

The national safety overhaul of China’s coal industry is already reaping results despite the mine disasters this year.

Last year, 2361 miners were killed in the Chinese coal industry, compared with expectations just four years ago that around 6000 miners die annually.

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