China to slash coal production amidst falling demand


Domestic coal demand decreased 2.9% year on year in 2014 and is expected to have dropped 4% in 2015. The economic slowdown, stronger environmental protection measures and restructuring have resulted in dwindling demand, said Jiang Zhimin, deputy head of the China National Coal Association.

Measures aimed at cutting coal production capacity include a pause in new mine projects, the closure of outdated production facilities and expediting coal-electricity integration.

In the next three years, China plans to shutter 4,300 coal mines, eliminate outdated production capacity of 700 million tons and relocate 1 million employees, according to the report. The central government has earmarked CNY 30 billion ($4.57 billion) for the relocation.

In the past five years, China has cut some 560 million tons of coal production capacity and closed 7,250 coal mines, according to the National Coal Association.

China had approximately 11,000 coal mines at the end of 2015 with a total capacity of 5.7 billion tons. Of these, around 1,000 had annual capacity of more than 1.2 million tons – some 400 more than in 2010.

The country is nevertheless leading the way in embracing green energy. China was the biggest investor in clean energy last year, channeling $110.5 billion into the sector and accounting for 17% of the total global clean energy investment.

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