China’s production of raw coal for all uses from all coal mines nationwide increased by 4.9% on year to reach 3.7 BnT for CY18, making for a second straight year of growth in coal production, according to a new report from the National Bureau of Statistics (NBS) on December 9.
Usually, NBS data only records output among miners above a designated size (those whose annual income from coal mining reaches Yuan 20 Million or USD 0.28 Million), Mysteel Global notes. Full industry data for CY18 had not been previously published.
Last year’s growth of coal production was achieved thanks to the commissioning of new and advanced coal capacity and in spite of the central government’s vigorous campaign launched in CY16 to eliminate excess and outdated coal capacity, NBS noted.
In CY16, nationwide coal production had plunged by 9% on year to 3.4 BnT, NBS data shows, largely because over 250 MnT per year of excess capacity was removed that year.
However, with the steady commissioning of advanced coal capacity, the output of coal last year was close to the level of CY15 – though still lower than the 4 BnT recorded in CY13, the data showed.
China’s central government had advocated that 800 MnT per year of excess coal capacity be removed over 2016-2020, as reported. The campaign was aimed at reducing pollution and carbon emissions, preventing the cut-throat competition prevalent among coal miners and to secure the steady supplies of coal for energy in the country.
However, Beijing’s elimination target was actually fulfilled two years ahead of schedule in CY18, as Mysteel Global reported, so that by the end of last year, China was hosting 3.5 BnT annual raw coal capacities, according to National Energy Administration data. Another 1 BnT per year of capacity was under construction.
On the other hand, the monthly-updated data for coal production compiled by NBS shows that during last year, China’s total raw coal output from all the country’s miners above the designated size rose by 5.2% on year to reach 3.5 BnT.
For 2019, the country’s raw coal output seems set to record a third consecutive year of growth, as over January-October, the total production volume from miners above the designated size grew 4.5% on year at 3.1 BnT, as reported. On an annualized basis, this would put full calendar year output among those mining enterprises at 3.72 BnT, Mysteel Global notes.
With the elimination of small-sized and outmoded capacity in recent years, China’s core mining hubs have contributed a larger proportion of coal production, the report noted. For CY18, coal output from all mines in the country’s top five provinces or regions totaled 2.8 BnT, or 76.8% of the country’s total, which was 10.2% higher from CY13, according to the data.
The five provinces or regions comprise Inner Mongolia and Shanxi in North China, and Shaanxi, Ningxia and Xinjiang in Northwest China.
Merger and acquisition activity among coal mining companies under the government guidance has seen the number of domestic coal mining companies above the designated size plunge by 47.7% over 2013-2018 to just 2,556 enterprises, while the average coal output from these miners surged 72.8% to 1.4 MnT per year over the same period, according to NBS data.
Over 2013-2018 too, the number of small-sized companies with annual coal capacities below 900,000 MT declined sharply by 2,290 or 50.6% to 2,237 units, while total coal output from the small miners accounted for 14.4% of the CY18 volume, or 3.9% lower than in CY13, the NBS data shows.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint Research.
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