China Expects to Complete Coal Production Capacity Reduction Ahead of Schedule, Says NDRC Executive(Yicai Global) Nov. 22 -- China will reduce number of coal mines to 7,000 next year from 10,800 in 2015 as part of its major capacity reduction program, said a senior executive of the country's top macro-economic planner. China's relevant government departments will continue to apply comprehensive measures to guide and reduce the coal price and bring it to a reasonable range as it is relatively high, said Lian Weiliang, deputy director of the National Development and Reform Commission (NDRC), at the 2018 China Coal Trade Conference held in Qinhuangdao, northeastern China's Hebei province, yesterday.
Signing medium- and long-term contracts and making more deals in advance are some ways to improve the quality of coal supply system, Lian suggested.
Coal enterprises should not expect high-prices for long-term as is not conducive to cutting high-cost backward production capacity, reducing the cost of energy in the society and the coordinated development of upstream and downstream industries, Lian warned.
However, relevant enterprises, including power and upstream firms, should not expect low prices in the coal industry either, Lian said, because low price goes against the safe the development of the coal industry, energy-saving and cost-reduction in the whole society as well as larger-scale use of clean energy.
At present, the latest Bohai-Rim Steam-Coal Price Index (BSPI) is CNY578 (USD87.3)/ton, down by CNY3/ton from the last term. Its price has fallen for five consecutive years with a cumulative decline of CNY8 /ton.
Keeping coal prices within a reasonable range will allow the market to play a decisive role in the allocation of resources, and will show the constructive role the government plays, Lian emphasized. It will also contribute to the sound development of the coal and related industries.
The number of coal mines across China will be reduced from 10,800 in 2015 to around 7,000 by the end of this year, Lian disclosed. China's task of cutting excess coal production capacity is expected to be completed in 2018, ahead of schedule.
