The growing demand for electricity will raise coal consumption this year by 7% to 560 million metric tons, a China-based industry official told Dow Jones last week.

Electricity production is expected to rise 5% to 1,720 billion kilowatt-hours relfecting rapid growth in the domestic economy. Thermal power generation units will provide 1,400 billion KWh, up 5% on the 2002 year.

The official said that new coal mines being built in Inner Mongolia, will increase China's coal production capacity by about 50 million tons this year, enough to meet demand for new power generation.

But in other reports, a study completed by China National Coal Association (CNCA), predicts that China will face a shortfall in coal supply in the next few years. By the year 2005 the shortfall is expected to be in the region of 200Mt.

The study forecast the coal supply shortfall will mainly result from delayed coal resource exploration and development as well as the dropping capacity of producing coal mines. This is the result of the implementation of the state policy of keeping a tight rein on the national coal output and strict control on the construction of new coal mines.

It is estimated that by 2010 China will have a national total power generating capacity of 550 million kW, of which 350 million kW will be coal fired with an estimated electric coal consumption of 800Mt a year.

Compared with the year 2000, this will be 130 million kW in generating capacity and 250Mt of coal consumption more, respectively.