China urges coal miners to boost output for summer season

China’s peak power use comes during summer, when air-conditioning use rises to cool homes and offices. (Stock image)

China’s central state planner urged miners to boost domestic coal output and storage to ensure sufficient energy supplies during the peak summer season, while asking local authorities to maintain coal import restrictions.

The moves came on Thursday in a meeting called by the state planner, the National Development and Reform Commission (NDRC). The meeting, held partly online, involved 18 regional governments, the State Grid Corporation, coal miners, power generators and oil companies, according to a WeChat posting from a State Grid think tank on Monday.

The NDRC asked local authorities to build up coal stocks to 600 million tonnes to ensure sufficient supplies and stabilise coal prices

China’s peak power use comes during summer, when air-conditioning use rises to cool homes and offices.

“Top coal mining regions, especially Shanxi, Shaanxi and Inner Mongolia, should ramp up production and increase market supplies,” said the NDRC, according to the State Grid.

While shutting down small mines, some regions – including the western areas of Inner Mongolia where many big coal mines are located – have been reining in illegal production since May, helping to drive benchmark coal prices up by 25%.

The NDRC ordered coal buyers to fix at least 80% of both their domestic and overseas purchases in long-term contracts, up from 75%.

“Imported coal is cheaper than domestic, and some countries have cut coal consumption to near zero, which led to drastic increase on coal imports,” said the NDRC.

“We will continue to orderly control coal imports, trying to bring in less during the slack season and more during the peak season, to be in line with market needs.”

China had stepped up customs checks for coal imports through lengthy processing delays and import quotas, following record imports for the first five months of the year.

The NDRC did not respond to a faxed request for comment.

The NDRC also asked local authorities to build up coal stocks to 600 million tonnes to ensure sufficient supplies and stabilise coal prices.

(By Muyu Xu and Tom Daly; Editing by Tom Hogue)

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