China is facing a gradual decline in the production capacity of premium low-volatile hard coking coal in recent years, due to the depletion of high-quality coal resources.
As of the end of 2023, the national production capacity of PLV HCC mines stood at 53.7 million tonnes per annum (mntpa), marking a decrease of 8% or 4.65 mntpa compared to 2019, as per Sxcoal’s Coal Mine database.
This decline is predominately attributed to the resource depletion after decades of extraction. Miners, therefore, have transitioned to exploring other coal seams, or preserved the remaining resource and turned to inferior coal that is used for blending in the process of coke making.
In Liulin county, one major PLV HCC hub in Shanxi province, coal mines are finding ways to secure output when the premium resource is running low. As mentioned in the county’s government summary in 2023, coal mines expanded the extraction of the 8th seam for PLV HCC and the 5th seam for inferior coal. Also, Nahagou mine modified its extraction project to focus on the 9th coal seam, and the Xingwu coal mine initiated a deepening project for the lower coal seam.
According to Sxcoal’s research, some mines in Huodong mining area in Shanxi are experiencing a decline in coal quality, leading to a shift to extracting high-sulphur coal. In the Xiangning mining area of Shanxi, there are mines facing depletion of the 2nd coal seam.
In 2024, no new PLV mines are expected to be commissioned nationwide. With the resource depletion carrying on and more capacity turning to inferior coal, the production capacity of PLV HCC is expected to continue declining in 2024.
China’s PLV HCC resources are mainly distributed in Shanxi, Hebei, Anhui, and Heilongjiang. Specifically, in Shanxi, they are found in the Liliu mining area’s Permian Shanxi Formation 4th and 5th coal seams, Huodong mining area’s Permian Shanxi Formation 2nd and 3rd coal seams, Xishan mining area’s Permian Shanxi Formation 2nd coal seam, and Xiangning mining area’s Permian Shanxi Formation 2nd coal seam.
In Anhui’s Huaibei mining area, they are located in the Permian Shihezi Formation 8th and 10th coal seams, while in Hebei’s Fengfeng mining area, they are found in the Permian Shanxi Formation 2nd coal seam. In Heilongjiang’s Qitaihe mining area, they are situated in the Cretaceous Chengzihe Formation 62nd coal seam.
(In this context, PLV HCC refers to coking coal with a volatile matter no higher than 23.5%, sulphur no higher than 0.8%, and CSR no lower than 65.)
Note: This article is being carried under the article exchange agreement between CoalMint and SX Coal.