The Chinese government unveiled plans Saturday to form eight to 10
large coal mining firms capable of each producing more than 50
million tons of coal annually to ensure that supplies meet China's
rising demand.
The Chinese Society of the Coal Industry, formerly the Ministry
of the Coal Industry, announced at the ongoing national reform and
development conference for the coal sector that four or five
of?the planned firms will be expected to turn out 100 million
tons each on a yearly basis.
Those large merged firms are expected to control 60 percent of
the domestic coal market.
The plan was formed after the government had?found that a
lack of large coal firms made it hard to relieve serious coal
shortages earlier this year.
Only four companies are capable of producing 30 million tons or
more annually, accounting for only 14 percent of the
domestic?market demand, while major coal producers in the
United States can control up to 40 percent of the American coal
market.
Shenhua Group, the country's biggest coal producer with a coal
output this year expected to surpass a record 100 million tons,
will become the sixth biggest coal producer in the world.
Officials with the society noted that the insufficient number of
major State-owned coal mining enterprises in China affected the
central government's recent intervention in coal supplies as
the?country's power sector suffered coal shortages for
thermal-power?generation.
China boasts 28,000 mines with a production capacity of
approximately 50,000 tons each, explained the officials.
The society also disclosed plans to build large coal
mining?centers and big and medium-sized mines equipped with
advanced equipment.
China's coal output for this year is estimated at a record
1.6?billion tons, up 14 percent over last year's 1.4 billion
tons, industry sources said on Friday.
Nevertheless, coal is in short supply because of rapidly rising
demand, shipment costs and coal prices.
China's major coal-fired power plants sent urgent signals that
they?urgently needed fuel to generate. Some appealed for state
intervention to solve their acute coal shortages, which disrupted
electricity production.
A petition filed by China Huadian Group, China Huaneng
Enterprise Group and five other major power generating units said
that most power plants in central and north China faced
shortages.
Coal reserves at the power plants had dropped below the secure
levels, and some plants had to shut down generators, it said.
Some people attributed the power shortage to soaring coal
prices, rising transportation costs, and declining coal stocks and
quality, but experts cited the remarkable growth of the
Chinese?economy as the fundamental reason for the energy
shortage.
In 2003, China's economic growth rate is expected to hit 8.5
percent.
Some argued the reform pace of China's energy system was lagging
behind national economic development.
Electricity pricing was still subject to government regulation,
while coal prices floated in line with market demands, said
an?official with the China Huaneng Enterprise Group.
Thousands of small coal mines were closed for
safety?inspections following a series of fatal explosions
across the country, but many have since resumed production.
Coal had accounted for at least 70 percent of China's energy
supplies, and the ratio would remain unchanged for a long period to
come, said the official.
(China Daily December 21, 2003)