Shanxi recaptures raw coal output crown in 2020

In 2020, Shanxi produced 1.06 billion tonnes of raw coal for all uses, representing a healthy 8.2% increase from 2019, while that for Inner Mongolia – also in North China – decreased 7.8% on year to around 1 billion tonnes, according to the NBS statistics.

During last year alone, Shanxi also removed 41 million tonnes/year of raw coal capacity from production, according to a report by Shanxi Daily. Over 2016-2020, the province eliminated 156.9 million t/y of excess capacity, more than meeting the target set by the central government for Shanxi to eliminate 113.8 million t/y of coal capacity over the five-year period.

As of last year, all coal mines in the province whose capacity was lower than 600,000 t/y or those whose operations had been suspended for a long time were removed, while some new and ‘advanced’ coal capacity was commissioned in the meantime, according to the report.

Over the past five years, total raw coal capacity in Shanxi has declined from 1.46 billion t/y to 1.35 billion t/y, while the number of coal mines in the province has dropped from 1,078 to 900, data from Shanxi’s energy authority showed. On the other hand, the ratio of advanced coal capacity in Shanxi – mines employing new technology and operating with improved efficiency – had soared from 30% to 68% of all mines being worked over the same period.

Advanced coal mining capacity is evaluated according to several standards including mechanization level, resource utilization rate, safety and environmental protection conditions, and coal quality. For example, for a mine to be regarded as ‘advanced’, the mine needs to have suffered no fatal accidents among mine workers in previous three years before the evaluation date, the National Development and Reform Committee has mandated.

Meanwhile, during 2020 the notable decline in coal production in Inner Mongolia was mainly a consequence of the region’s intensive investigation began last February to identify cases of illegal mining activity over the past 20 years, according to a local source.

Official data from Inner Mongolia shows that during the checks last year when regional authorities had tightened controls on coal mining and sales, a total of 869 people were investigated and economic losses either recouped or saved totalled a huge Yuan 33.8 billion ($5.2 billion).

Over 2016-2019, Inner Mongolia had been China’s top domestic supplier of thermal coal, though the region’s lower coal output during much of 2020 had exacerbated the supply tightness in the country’s thermal coal market. Only during last December did the region’s coal production finally post on-year growth, Mysteel Global notes.

Written by Sean Xie, xiepy@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com