China has ordered major coal mines to raise thermal coal output by another 500,000 tonnes per day, the latest concerted effort by the government to boost supplies to its electric utilities ahead of the winter, sources said on Tuesday. Experts say the rapid-fire calls for output increases reflect growing panic about the unintended consequences of Beijing’s efforts to cut excess coal mining and shift the country towards using renewable energy sources.
In the fourth meeting with coal mining executives this month, the National Development and Reform Commission (NDRC) called on 74 major miners to increase output, unleashing another 15 million tonnes of new supply each month onto the market, two people who were briefed on the gathering said.
The latest change doubles the output increases the government has approved in recent days to 30 million tonnes, equivalent to 1-1/2 times China’s average monthly imports of coal this year.
Last Friday, the government partially reversed sweeping capacity cuts enforced earlier this year. Those reductions in production capacity triggered a frenzied price rally and depleted domestic stockpiles this year.
“The amount is raised again as the increase was not enough to catch up with the demand from the power generators,” said Zhang Min, a coal analyst with the Sublime China Information Group and one of the sources who had spoken to the companies participating in the meeting.
Experts say the frequency of the meetings and the rapid-fire calls for output increases reflect growing panic about the unintended consequences of Beijing’s efforts to cut excess coal mining and shift the country, the world’s second-largest energy market, towards using cleaner, renewable sources.