China's top coal producing provinces are speeding up releasing of high-quality mining capacity recently, in response to the call of the National Development and Reform Commission, aiming to address current supply tightness and exorbitant coal prices in the peak power consumption period.
More than 800 million tonnes per annum (Mtpa) of coal production capacity is under construction in top three coal production provinces ‒ Inner Mongolia, Shanxi and Shaanxi, with 500 Mtpa newly added, of which about 200 Mtpa capacity is to be put on the market.
The move is closely related to a special meeting on ensuring coal supply in the summer peak season, presided by the NDRC a month ago.
The meeting pointed out around 90 Mtpa production capacity had been added in the first half of this year, and there would be 200-300 Mtpa newly added by the end of 2017 when some projects are completed in the second half.
"Only by guaranteeing advanced capacity release can we do well for the reduction of overcapacity, "said an official of the NDRC.
The country's top economic planner emphasized relevant departments should cope with capacity release and reduction in an appropriate manner: prompting profitable and high-quality mines and eliminating loss-making and resource-depleting mines.
Inner Mongolia has newly built production capacity of 240.77 Mtpa, the largest in the country. "There are 40 mines in trial operation in the region with newly-added capacity of 144.68 Mtpa, including nine 10-Mtpa-level mines," a local trader said.
Shanxi province had 343 coal mines under construction by the end of June 30, 2017, with capacity totaling 168.1Mtpa. Presently, 44 coal mines have stated trial production, with total capacity at 22.7 Mtpa, accounting for 13.5% of the total.
Shaanxi strengthened coal supply with increased production capacity of 92.52 Mtpa, 45 Mtpa of which can be put on the market.
Recently, the NDRC approved a coal mine construction project in Xinjiang. It's reported the coal mine has designed production capacity of 6 Mtpa, with total investment of 2.97 billion yuan ($444.8 million).
As of June, these four provinces have combined production capacity 3.5 Btpa, making up 70% of the country's total.
It's said there are 150 mines or so being built in China yet to gain approvals. Fast-track approval for those meeting relevant standards will help further boost supplying capacity.
(Writing by Alex Guo Editing by Harry Huo)
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