China Coal Industry

The Chinese coal industry is the world’s largest in terms of production. Its annual production totaled 2.79 billion tons in 2008. Around 2.75 billion tons of this was for domestic consumption, with the power sector accounting for 76% of the total domestic consumption. Since China is deficient in oil and natural gas, coal continues to be a major source for the country’s energy requirements. Despite the large domestic demand, coal does contribute to country’s export revenues. Apart from energy, coal is used in the metallurgical, chemical and pharmaceutical industries.

China Coal Industry: Major Players

In 2007, the labor intensive Chinese coal industry operated through a network of 6,645 enterprises. Coal is extensively produced at around 23,000 mines spread across 1,300 counties and cities. Domestic production is dominated by:

Shenhua Group: With annual production at more than 185 million tons, Shenhua Group ranks first in the country in terms of production.

China National Coal Group Corp: This is the second largest coal producer, with an annual coal output of more than 87 million tons.

• Datong Coal Mine (Shanxi Province): China’s third-largest coal producer is government owned. The annual coal output is about 61 million tons.
• Yanzhou Coal and China Coal: This commands the fourth position in the Chinese coal industry, with an annual output of more than 35 million tons.

China Coal Industry: Issues

The Chinese coal industry is struggling with the following issues:

• Mine accidents: With rising coal production, the frequency of fires in coal mines has surged. In 2007, mining accidents resulted in 3,770 casualties. Inadequate safety measures in small mines were the main cause of these accidents.
• Environmental issues: The Chinese coal industry needs to address the high emission of pollutants from coal plants. Air pollution causes chronic obstructive pulmonary diseases (COPD), resulting from exposure to SO2 particulates.
• Technological issues: Coal mining units depend heavily on domestically produced equipments. In terms of efficiency, these equipments lag far behind the advanced technology used in Western nations. To enhance the efficiency levels, the Chinese government needs to emphasize on the incorporation of imported high-tech mining technology.

Given China’s economic growth rates, demand is expected to spiral. However, with overall reserves of 1.3 trillion tons, the Chinese coal industry is in a position to meet the rising demand, provided it implements efficient technology at the earliest.