OVERVIEW
China ranks third in the world for coal resources and its annual coal output and consumption rank number one in the world. Coal mining is one of China’s basic industries and plays an important role in the Chinese economy and the development of society. Coal is the major energy resource and accounts for over 70% of the total of non-reusable energy. This situation will not change in the long term.
The output of coal in China has steadily increased in recent years. Production is expected to surpass 2 billion tons in 2005.
The country’s economy will maintain its high growth rate, which will lead to increasing consumption of coal for generating electricity. The coal consumption used for generating electricity will increase from the 980 million tons in 2004 to 1.6 billion tons in 2020. Coal will also widely used in the metallurgical, building material and chemical industries.
Due to the increased demand for coal, the industry has experienced profits and gains since 2001 and achieved US$5.15 billion in profits in 2004.
China has 25,400 coalmines, of these 778 are major state-owned mines, which produced 57 percent of the country's total 1.9 billion-ton coal output in 2004. 15% of the total was produced by 1,200 medium-sized State-owned mines and 28% by 23,400 small coalmines.
By the end of 2005 China will have shut down 1,933 unqualified coalmines and 9,067 illegal collieries in efforts to cut the death toll in the mining industry. Since the start of 2005, 12,990 mines have been suspended by the government; of these 4,672 have passed safety checks after correcting the problem. Those that have failed to pass the government assessments at the end of 2005 will be closed for good. The closures will not have much impact on output, as most of the coalmines are small.
The safety situation is very serious. Gas explosions, floods, mine collapses and other accidents kill over 6,000 miners each year. There is a long way to go in drastically improving China’s mining safety record.
Sector Framework
The main related governmental ministries are:
· National Development & Reform Commission (NDRC) - macro-management of the national energy industries including coal. To draft strategic plans for coal industry and laws and regulations. To approve national key coal projects.
· Ministry of Commerce (MOC) - draft regulations and policy on JVs and foreign wholly funded projects in mining. Also involve approving foreign-funded projects.
· The Ministry of Land and Resources (MOLAR) - is directly responsible for the mining projects’ approval and draft relevant policy with other governments department.
· State Administration of Work Safety (SAWS) and State Administration of Coal Mine Safety Supervision - are responsible for all workplace safety, including mines and draft safety-related rules and supervise the implementation.
There are three types of coal mine in China; these are key state-owned coalmines, state-owned coalmines and township or village coal mines.
Local governments are responsible for issuing coalmine production certification and are powerful in controlling the mining projects in their managed areas.
The top ten profitable organisations in the coal sector are the Shenhua Group Co., Ltd., the China National Coal Group, the Shandong Yankuang Group, the Heilongjiang Long Mine Group Co., Ltd., the Shanxi Coking Coal Group Co., Ltd., the Yongcheng Coal Electric Group, the Shanxi Jinchen Anthracite Mining Group Co., the Pingdingshan Coal Mining Group, and the Shanxi Lanhua Coal Group. These generated total profits amounting to RMB24.974 billion in 2004, accounting for 74.1 percent of the total of large coalmines.
China’s top 100 coal mining enterprises in 2005 can be found a separate list.
