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Is China headed for coal production overcapacity?
The nation's coal production increased 6.8% year on year to 827 million tons in the first four months of this year, the association estimated.
Last year China mined 2.72 billion tons of coal and consumed 2.74 billion tons.
Jiang Zhimin, deputy director of the China Coal Industry Association, told the 5th China Energy Strategy Summit in Beijing that the industry faces challenges of eliminating outdated production facilities and the construction of more modern and large coal mine groups. It is estimated that 70% of the 80,000 coal mine companies in China are small with an annual production averaging 300,000 tons.
He said the country has 24 coal mine groups which each have an annual production of more than 10 million tons. Collectively, they mined 840 tons last year. Jiang estimated that the nation's coal demand will exceed more than 3.5 billion tons in 2020.
"While we tackle the financial crisis, we should eye the long-term development of the coal industry," Jiang suggested. "We should consider building more internationally competitive coal mine groups and increase spending to curb major colliery accidents."
China Daily reported China's government hopes to achieve more mergers and acquisitions to generate larger mining groups for efficiency and safety.
Another talk at the Chinese Energy Strategy Summit says the government is also considering adjusting its nuclear power development plan.
Zhou Xi'an, director of the General Affairs Department of the National Energy Administration, said China will increase nuclear power development in coastal areas while scientifically planning nuclear power stations inland. However, China Daily reported he would not provide more details.
Zhou said China should take the economic slowdown as an opportunity to adjust the energy mix. "We need to develop more clean energy, including hydropower, wind power, solar power and biofuels," he said. Coal comprises 70% of China's total energy consumption.
He added that China's wind power generating capacity will be increased to 20 million KW in 2010 and to 100 million KW in 2020. Zhou also suggests the country invest more in development of key techniques and component parts of nuclear and wind power equipment, as well as push for pricing reforms for energy saving and pollution reduction.
Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment.
