China to ramp up coal production to meet demand

by on
Style:
Category:
Commodities

While the rest of the world is trying to com to grips with the European Union’s proposed carbon border adjustment mechanism (CBAM) – which calls for the levying of charges on non-E.U. products in relation to their embedded carbon footprint — China, on the other hand, is currently grappling with a slightly different energy-related issue.

A massive heat wave in some parts of the country coupled with a shortage of coal because of China’s spat with chief supplier Australia has sent coal prices soaring.

Want more from MetalMiner? We offer exclusive analyst commentary in our weekly updates – all metals, no sales fluff. Sign up here.

China to ramp up coal production

coal pile

ShiningBlack/Adobe Stock

Now, China, the world’s biggest consumer of coal, plans to add almost 110 million tons (MT) per year of advanced production capacity in the second half of this year to meet the rising demand of coal.

This Economic Times reported China’s National Development and Reform Commission (NDRC) said that around 400 MT of coal mining capacity is under review for the government’s approval. Another 70 MT capacity is also under construction, and would be launched in a phased manner.

What’s more, China’s state planner has asked power plants to build their coal inventory to the equivalent of at least seven days of consumption by July 21. News agency Reuters said the Chinese government was trying its best to ensure electric supply to the coal-fired plants amid surging power consumption from industrial and residential users.

In the first half of 2021, China has already added over 140 MT of coal mining capacity.

Eleven provinces registered record-breaking power load a few days ago, the Economic Times reported, as the heat wave led to higher use of electricity. In the first six months of 2021, power consumption rose by 16% from a year earlier, the report added.

Old coal

While simultaneously augmenting coal capacity, the NDRC has come down on outdated coal capacity. Where once there were 10,000 coal mines in China in 2015, now there are about 5,000. The NDRC has been urging coal miners to set up advanced mining capacity and ramp up output.

China’s average daily coal consumption has gone up to over 2.2 MT at key power plants in at least eight provinces in China as of July 15, Reuters reported.

Meanwhile, the South China Morning Post quoted the NDRC, which said China will release over 10 MT of coal from its state reserves.

Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.