Commodities

China's coal output hits highest in over three years as mines start up

Updated : January 21, 2019 12:24 PM IST

Miners produced 320.38 million tonnes of coal in December, according to data released on Monday by the National Bureau of Statistics. That is the largest volume since June, 2015.

China approved more than 45 billion yuan's ($6.64 billion)worth of new coal mining projects last year, much more than 2017, official documents show.

Some miners and traders expect supplies to fall sharply in January following a crackdown on coal mines after a major accident on January 13 in the northwestern province of Shaanxi, potentially dragging on output through the year.

China's December coal output climbed 2.1 percent from the year before, government data showed, hitting the highest level in over three years as major miners ramped up production amid robust winter demand and after the country started up new mines.

Miners produced 320.38 million tonnes of coal in December, according to data released on Monday by the National Bureau of Statistics. That is the largest volume since June, 2015.

China approved more than 45 billion yuan's ($6.64 billion)worth of new coal mining projects last year, much more than 2017, official documents show.

That came after the country closed old and more-polluting coal mines as part of its battle to clean up the environment.

"Coal mining capacity coming online will lead to another increase in output this year after boosting December output to a more than three-year high," said a Beijing-based coal analyst with a major broker. He declined to be identified as he did not have approval from the securities regulator to be quoted in media discussing the matter.

The new projects stoked overall coal output last year, with annual production rising 5.2 percent to the highest since 2015 at 3.55 billion tonnes.

However, some miners and traders expect supplies to fall sharply in January following a crackdown on coal mines after a major accident on January 13 in the northwestern province of Shaanxi, potentially dragging on output through the year.

"It is now possible that Shaanxi will implement the strictest-ever regulations on illegal production, which would significantly reduce output in the province for the year," Zhai Yu, senior consultant at analysts Wood Mackenzie said in a note published last week.

"If stricter checks are extended to other provinces, domestic supply could tighten from its currently relaxed situation, helping coal imports as a result," Zhai wrote.

Shaanxi accounts for about 20 percent of China's annual coal production.

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China's coal output hits highest in over three years as mines start up

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