MAC: Mines and Communities

China plans huge new coal groups, as it leads world consumption

Published by MAC on 2007-11-08

China plans huge new coal groups, as it leads world consumption

8th November 2007

China to restructure coal industry by forming giant groups


8th November 2007

China plans to restructure its coal industry by forming six to eight coal groups with each boasting a production capacity of 100 million tons by 2010 through mergers and acquisitions, according to a recent government document.

With the average output remaining low, China's coal companies need regrouping to make better use of their resources, said Pu Hongjiu, vice chairman of the China National Coal Association.

The country will also have another eight to ten coal groups with a production capacity of 50 million tons each, said the document jointly issued by five ministries including the National Development and Reform Commission.

These giant groups are expected to contribute more than half of China's coal output of 2.6 billion tons in 2010, it added. The move comes in the wake of a nationwide campaign to close small coal mines, which account for one third of China's total production but two thirds of the deaths resulting from colliery accidents. In 2006, accidents in small coal mines claimed 3,431 lives.

China produced 2.4 billion tons of coal last year but production of its 80,000 coal companies averaged only 30,000 tons.

Large companies will have more resources by acquiring small ones, said Huang Qing, directorate secretary with Shenhua Group, which produced 203 million tons of raw coal last year to become China's first coal company to pass the 200-million-ton milestone.

The country's second largest coal producer, China National Coal Group, produced 90.6 million tons of coal last year.

The document also encouraged mergers between companies from different regions and from different sectors such as coal, power and transportation.

Fueled by coal

China's addiction grows despite safety, environmental concerns

Elaine Kurtenbach


8th November 2007

China mined a record 2.4 billion tons of coal in 2006. That's twice as much as was mined in the United States.

JUNGAR QI, China -- Almost nonstop, gargantuan 145-ton trucks rumble through China's biggest open-pit coal mine, sending up clouds of soot as they dump their loads into mechanized sorters.

The black treasure has transformed this once-isolated crossroads nestled in the sand-sculpted ravines of Inner Mongolia into a bleak boom town of nearly 300,000 people. Day and night, long and dusty trains haul out coal to electric power plants and factories in the east, fueling China's explosive growth.

Coal is big, and getting bigger. As oil and natural gas prices soar, the world is relying ever more on the cheap, black-burning mainstay of the Industrial Revolution. Mining companies are racing into Africa. Workers are laying miles of new railroad track to haul coal from the Powder River Basin in Wyoming and Montana.

In Ohio, coal employment is closing in on 3,000 workers, up from 2,500 in 2005, according to the Ohio Coal Association. Perhaps more impressive is the amount of coal mined in the state -- about 26 million tons a year, up from 19 million at the beginning of this decade, the association said.

But nowhere is coal bigger than in China.

The explosion of coal comes amid rising alarm over its dire consequences for workers and the environment. An average of 13 Chinese miners die every day in explosions, floods, fires and cave-ins. Toxic clouds of mercury and other chemicals from mining and burning coal are poisoning the air and water far beyond China's borders and polluting the food chain.

So far, attempts to clean up coal have largely not worked. Technology to reduce or cut out carbon-dioxide emissions is expensive and years away from widespread commercial use.

"Not very many people are talking about what do we do to live with the consequences of what's happening," said James Brock, a longtime industry consultant in the Beijing office of Cambridge Energy Research Associates.

"The polar bears are doomed -- they're going to museums. At the end of this century the Arctic ice cap will be gone. That means a lot of water rising, not by inches but meters."

Today, most coal goes to electrical power plants. In developing nations such as India, China and in Africa, coal is the staple -- and affordable -- source of fuel with which families run their first washing machines and televisions. Worldwide electricity consumption is expected to double by 2030, the World Energy Council says.

In America, about 150 new coal-fired electrical plants are proposed over the next decade. In China, there are plans for a coal-fired power plant to go on line nearly every week. Emissions from these plants alone could nullify the cuts made by Europe, Japan and other rich nations under the Kyoto Protocol, according to a report from the Woodrow Wilson International Center for Scholars in Washington.

In a developing country like China, coal is the backbone of the energy system.

Even the ultramodern Maglev railway line runs on electricity from a coal-fueled plant.

China mined a record 2.4 billion tons of coal in 2006, up 8.1 percent from a year earlier. But even that can't keep boilers and blast furnaces stoked in an economy growing more than 10 percent a year. So China became a net coal importer for the first time this year.

China is the world's biggest consumer and producer of coal, but it's far from the only one. U.S. coal production hit a record 1.2 billion tons last year, according to the National Mining Association, and is forecast by the government to rise 50 percent by 2030. Yet the United States rejected the Kyoto Protocol, arguing that the required emissions cuts could slow economic growth.

Rising demand can be met because coal is Earth's most abundant fossil fuel, with reserves expected to last 250 years -- far longer than forecasts for petroleum. And whether in China, India, the United States or Europe, coal is available at home, away from the instability of the Middle East.

"The U.S. has under its own soil at least a 200-year supply of coal. China has a very long-term supply of coal," Steve Papermaster, co-chairman of the energy committee of President Bush's Council of Advisers on Science and Technology, told a recent conference in Shanghai.

For several years, cleaner burning natural gas appeared a promising substitute. But soaring prices and worries over the reliability of Mideast and Russian supplies have dimmed the promise of that option. Alternatives such as wind and solar power are getting cheaper but still can't compete with coal.

Most experts think that whatever the costs to the environment and public health, coal is with us to stay. "The question is not about putting a line through coal and saying we're not going to use it," said Milton Catelin, chief executive of the London-based World Coal Institute, an industry association. "There's a future for coal. The developing world will have to use coal. They need cheap energy to get ahead."

The solution Catelin and others in the industry are pushing is clean technology, although they admit they are late to the game. "The decade 1997-2007 was a lost decade" for clean coal technology, Catelin conceded. "We should have done much more. Now we're playing catch-up."

China reestructurará industria del carbón formando grandes conglomerados

BEIJING, (Xinhua)

8th November 2007

China planea reestructurar su industria carbonífera mediante la conformación de entre seis y ocho grandes grupos a través de fusiones y adquisiciones, cada uno de los cuales tendría una capacidad de producción de 100 millones de toneladas en 2010, según un documento revelado recientemente por el gobierno.

Con una producción promedio relativamente baja, las carboneras chinas necesitan reagruparse para obtener un mejor provecho de sus recursos, dijo Pu Hongjiu, vicepresidente de la Asociación Nacional de Carbón de China.

El país también tendrá otros ocho o diez grupos carboníferos, cada uno con una capacidad de producción de 50 toneladas, según el documento, emitido conjuntamente por cinco ministerios, entre ellos la Comisión Estatal de Desarrollo y Reforma.

El gobierno espera que estos "grupos gigantes" contribuyan más de la mitad de la producción del país, que según cálculos oficiales, será de 2.600millones de toneladas en 2010.

La estrategia tiene lugar luego del lanzamiento de una campaña nacional para cerrar las minas de carbón más pequeñas, las cuales representan un tercio de la producción total del país pero al mismo tiempo dos tercios de las muertes ocurridas en accidentes de minería. En 2006, los percances de este tipo ocurridos en minas pequeñas cobraron la vida de 3.431 personas.

El año pasado China produjo 2.400 millones de toneladas de carbón, pero el promedio de producción de sus 80.000 compañías carboníferas fue de sólo 30.000 toneladas.

Huang Qing, secretario del Grupo Shenhua, dijo que las grandes compañías tendrán más recursos adquiriendo a las más pequeñas. Shenhua produjo 203 millones de toneladas de carbón crudo el año pasado, convirtiéndose así en la primera carbonera china en superar la barrera de los 200 millones de toneladas.

Por su parte, el Grupo Nacional de Carbón de China, el segundo más grande productor del país, entregó 90,6 millones de toneladas del mineral, también en 2006. El documento también alentó las fusiones entre compañías de diferentes regiones y también de diferentes sectores, como por ejemplo el carbón, la energía, y el transporte.


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