Coal mines in Inner Mongolia ordered to increase production by 55%
What’s up: Seventy-two coal mines in China’s northern Inner Mongolia Autonomous Region have been ordered to boost production by nearly 100 million tons as the nation keep struggling with severe power shortages.
An urgent notice dated Thursday issued by the Inner Mongolia Energy Bureau gave the go-ahead for 72 mines in the three cities of Wuhai, Ordos, Hulunbuir and the Xilingol league region to increase production capacity. annual 98.35 million tons, or 55.11%, provided they do so safely.
Under the directive, which is part of a broader campaign to increase China’s baseload coal capacity, mines have been told to complete procedures for the increase by the end of the month. But it’s unclear how long that will take to translate to actual production.
The background: Since mid-September, several regions of the country have suffered power cuts and have been forced to ration electricity.
High coal prices – against a backdrop of government-imposed reductions in coal-generating capacity and carbon-reduction measures – combined with a relatively low cap on electricity prices meant that producers of electricity were selling below cost. This means that they have reduced their electricity production at a time when an economic recovery is pushing factories to consume much more electricity.
What’s Behind China’s Regional Blackouts
Since July, the National Development and Reform Commission has introduced a number of measures to secure supply, including releasing coal from state reserves, encouraging increased coal production by lifting quotas and extending test operations in the mines.
However, due to multiple factors, including security, environmental protection and land approval, these measures have been slow to materialize, analysts previously told Caixin.
Inner Mongolia had coal production of 1.006 billion tons in 2020, accounting for more than a quarter of China’s total output, according to published figures (link in Chinese) by the region’s energy bureau in February.
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