China is in the midst of a power crisis. In response to this, coal miners have been ordered to boost output by 15%. Some experts say that this will only make things worse, as China’s steel industry has already been impacted by economic slowdown and lower demand for raw materials. Will the orders increase coal miner safety? What other alternatives are there?
China to increase coal output by 15% in response to power crisis
BEIJING AP China plans to boost its coal production by 15 percent this year as part of efforts to end crippling energy shortages, the official Xinhua News Agency said Tuesday. The State Council, or Cabinet, will release detailed measures for this year’s plan to increase coal output soon, Xinhua said. It did not give details on the possible target for this year’s production or say whether it would raise exports.
China is in the midst of a power crisis, forcing factories and schools to close because of rolling blackouts across much of China. The crisis stems from shortages of coal and other energy sources, such as gas and oil.
The ruling Communist Party has responded by ordering factories to shut down thousands of mines temporarily and calling on electricity companies to boost power supplies. The country’s top economic planning agency, the National Development and Reform Commission, said earlier this month that China would increase coal output by 15 percent and lift exports 10 percent.
China plans to produce 3.2 billion tons of coal this year, up from 2.85 billion tons last year, Xinhua reported earlier this month, citing an unidentified source with the National Energy Administration. China produced 2.23 billion tons of coal last year and exported 310 million tons, government figures show.
China’s steel industry has already been hit by the economic slowdown and lower demand for raw materials. Coking coal futures on the Dalian Commodity Exchange, a benchmark for steel makers, have fallen about 16 percent this year to 418 yuan ($58) per ton. That is well below last year’s high of 807 yuan ($115) per ton.
Currently coal accounts for roughly 66% of China’s energy consumption, and coal-fired power plants produce over 80% of China’s electricity. The only alternatives seem to be oil, natural gas or nuclear power.
Oil imports have surged in recent years, putting a strain on government finances. Also ,the Chinese are not very fond of the nuclear option because of fears of a possible meltdown. So, as the leading producer and consumer of coal, this might be their best option.
The fact that Chinese steel producers are not getting a better price for their product does not bode well for other manufacturers, as they may have to cut back on production. Also ,China has to realize that it cannot continue to burn coal at this pace. As the leading producer of greenhouse gasses, it may affect not only China but other countries as well.