BEIJING, March 11 (Reuters) – China’s top coal-producing
province of Shanxi intends to stabilise output of the fossil
fuel this year with officials skipping production targets, after
energy security concern saw targets rise in the previous two
years.
The province accounted for nearly a third of production last
year when overall national output hit a record high.
Shanxi Vice Governor Wu Wei told a provincial delegation at
China’s annual parliamentary meeting that the province would
“make every effort to stabilise coal production and supply”.
Shanxi delegate Zhang Linshan told reporters on the
sidelines of last week’s provincial meeting that deliberations
differed from last year, when the province announced an increase
of 60 million metric tons for the year.
Shanxi targeted close to 1.37 billion metric tons for 2023,
versus 2022 production of 1.31 billion tons.
Zhang also said Shanxi was unlikely to approve new coal
mines.
The change in approach is in line with a regulatory notice
issued last month exhorting mines to curb overproduction, in
part to prevent accidents.
There is also a trend toward the consolidation of coal mines
in Shanxi, Zhang said.
Shanxi Coking Coal Group Chairman Zhao Jianze was quoted in
local media last week recommending the industry consolidate
production and bring small smaller mines under the purview of
larger state-owned miners, such as Shanxi Coking Coal.
Lower coal prices last year weighed on the budget of
resource-dependent Shanxi, one of China’s “rust belt” provinces.
“Since last year, Shanxi’s fiscal growth has slowed down
significantly due to factors such as the fall in coal prices and
the decline in profit of industrial enterprises,” Wu said.
Last year, the finance ministry issued “coal economic
constraint subsidy funds” worth 3.92 billion yuan ($545.25
million) to Shanxi, Wu said. He urged the central government to
make such subsidies a “long-term policy”.
National coal output reached 4.66 billion tons last year
amid a push to ensure energy security. Around 1.36 billion tons,
or 29%, was from Shanxi, statistics bureau data showed.
China has increasingly built renewable power plants in
recent years, with wind and solar capacity forecast to exceed
coal by year-end.
Still, power sent to the grid is still mostly generated by
coal, and concern over energy security has led provinces to
increase output following a crippling domestic coal and power
shortage in 2021.
($1 = 7.1894 Chinese yuan renminbi)
(Reporting by Colleen Howe; Editing by Christopher Cushing)
Read More: China’s top coal mining province sees production ‘stabilising’ -March 11, 2024