Climate goals: Excavators transfer coal at Lianyungang Port in China. Shanxi province has cut its annual growth target for the commodity by nearly half for this year. — AFP
Beijing: China’s coal boom is slowing as top mining regions limit growth and steer investment to the clean energy that will replace the dirtiest fossil fuel.
Seven straight years of rising output, including a 10% surge in 2022 after nationwide power outages crippled industry, have produced a glut of coal.
That’s kept prices low. But record production, which reached 4.7 billion tonnes in 2023, has incurred other costs, from increased fatalities among miners to poor financial performance at mining companies.
At the same time, China is running up against a deadline to peak coal consumption by 2025 to meet its climate goals. It means output growth could slow to 1.4% this year, which would be the weakest since 2017, Guosheng Securities Co said in a note.
The four biggest coal hubs, accounting for over 80% of output, have avoided the ambitious targets that characterised previous years, according to annual plans released by local governments.
Instead, much of their efforts are on supporting China’s explosive growth in renewables. The reports will set the tone for discussions at Beijing’s annual legislative meeting early next month, where energy security is likely to be a focus.
Shanxi province, the top coal miner, has cut its annual growth target to 57 million tonnes, from over 100 million tonnes last year.
Notably, it plans to deploy solar panels on vast swathes of land now too polluted from mining to grow crops or build houses, according to its report.
Inner Mongolia, the second-biggest producer, didn’t set a target for coal output but said it would fund 300 billion yuan in clean energy expansions. The plan is to take its capacity to generate renewable power above thermal for the first time.
The authorities also vowed to accelerate the construction of four desert mega bases as a part of China’s grand strategy to triple clean power by 2030.
No. 3 miner Shaanxi province said it plans only a marginal increase in coal production, while cutting coal burning to improve air pollution.
It will also support the 100-gigawatt expansion of China’s biggest solar panel maker, Longi Green Energy Technology Co.
The Xinjiang region, which has been a prime contributor to China’s coal output growth, said it’ll slow its expansion to 9%, from last year’s 11% increase, while pledging to keep pushing on renewables and hydrogen.
Iron ore’s decline this week – which has seen it shed 9% so far – shows no sign of abating, with lack of demand for Chinese steel weighing on prices.
China and France agreed to further strengthen cooperation in areas including agriculture, nuclear energy research and development, artificial intelligence and aerospace, at a bilateral strategic dialogue on Tuesday in Paris.
Governments around the world are anxious to secure supplies of critical minerals, fearing shortages will emerge as the energy shift drives demand. So why aren’t they snapping them up as prices crash? — Bloomberg
