Among the 200 coal mines under the integration
of the five major coal Groups, more than 60% has been still in production. The
reduced coal outputs of the shutdown month would be about 12 million tonnes,
which accounted for 4% of the monthly output all across the country.
As a major coal-producing province, Shanxi
is facing tough work in reducing the coal capacity. The coal mine accident happened
a few days ago in Datong Coal Mine Group (Datong Coal) impelled Shanxi Province
to launch the integration on the five major coal Groups.
On 30th March, the general
office of Shanxi Province issued notification that it requires the five major
coal Groups of the province to shut down for at least one month for the overhaul
and integration.
According to the notification, along with the
move of the coal mines shutdown and suspension, it is also necessary to conduct
comprehensive troubleshooting and regulation on hidden perils for safe
production. And the key point for the move is conduct examination and
verification on three aspects: holding shares, investments, and management. When
it comes to disaster and hidden perils prevention and control, the remediation
on water, fire, gas, coal dust, and roof is the key point.
After the finish of the streamlining of the
coal mines, the Groups mentioned above should adopt strict procedure and
standard of acceptance check in accordance with Management Measures on Acceptance Check for the Re-Commissioning and
Re-Construction of the Coal Mines in Shanxi Province.
The Groups must organize the work of
re-commissioning, re-construction, and acceptance check seriously, and only
when the mine has passed acceptance inspection, the production and construction
could restart.
The five major coal Groups are Datong Coal,
Shanxi Coking Coal Group (Coking Coal), Yangquan Coal Group (Yang Coal), Lu’an
Group, and Shanxi Jincheng Anthracite Mining Group (Jin Coal).
The notification also exposed 16 coal mines
that conducted unauthorized production and construction without going through
the examination procedure, and compelled an immediate shutdown. Those coal
mines are attached to Jin Coal (four), Datong Coal (three), Coking Coal (four),
Yang Coal (three), Jinneng Group (one), and Pingshuo Group (one), with total
capacity of 79.4 million tonnes.
“Shanxi Province published this policy to
further fulfill reform of the supply front issued by central government. It was
stimulated by the huge pressure of de-capacity and the coal mine accidents
happened recently,” the industry source said, “Shanxi province published strict
rules and regulations this time.”
On 23rd March, there’s a safety
accident under the shaft happened in Anping Coal Mine, which is a subordinate
company of Datong Coal in Shanyin Town, Shuozhou, Shanxi Province, among which
19 people were killed.
In 2008, Shanxi Province started the
largest-scaled coal enterprises reconstruction all across China. On September,
the government of Shanxi Province issued implementation suggestions that
required the coal enterprises scale of no less than 3 million tonnes per year
and the number of coal mines of no more than 1,500, which completely terminated
small coal mines and increased the proportion of the
major-coal-enterprise-produced-coal to the total outfit in Shanxi Province to
more than 75%.
At present, there are about 200 integration
mines of the major five Groups in Shanxi Province, among which there are 132
operating mines with the total capacity of 1.3 tonnes and 68 mines that were
under construction. To comply with the requirements issued by the government,
those mines have to shut down for at least one month, which would cause a 12-million-tonne
reduction on coal supply in April, accounted 4% of the total monthly output in
China.
It is expected the decrease of coal supply
in April will have a positive effect on price. The price of coking coal and
anthracite coal has increased a lot, while the step of restoring production and
the stringency on the over production examination determines whether the price
will keep grow or not.
16 illegal coal mines shut down, which may
push upward metallurgical coal price. Those coal mines have a total output of
120 million tonnes, among which there are 32 million tonnes of coking coal, 29
million tonnes of anthracite coal, and 18.4 million tonnes of steam coal. The
shutdown of the coal mines impose great influence on coking coal and anthracite
coal supply, but the sustainability of the influence still needs the further
observation.
Apart from the reorganization of coal
mines, the notification asked coal enterprises strictly implement production
regulation of 276-work-day and fulfill the official holiday system and
prohibited the high intensify production that over the capacity of the mine.
Coal Department of Shanxi Province has also
re-stipulated production capacity of the coal mine that operated in accordance
with specification. The new specified capacity is calculated by multiplying
0.84 with the present specified capacity and then rounded to the nearest number
of the result.
For the capacity reduction process in the
next 5 years, Shanxi Provincial government also formulated a schedule. According
to the Xinhua News Agency on 4th April, Shanxi Province will resolve
400 to 500 million tonnes excess capacity by the means of Five Keys and strive
to keep the coal production capacity within 1 billion tons.
The Five Keys means eliminating excess
capacity, pushing forward reorganization, replacing the outdated production
facilities, reducing the capacity specification, and putting off checking and
approving procedures.
*This article is an edited and translated version by CCM. The original article comes from Jiemian.com.
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