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InvestmentsChina coal's last hurrah comes too late for old mining towns By...

China coal’s last hurrah comes too late for old mining towns By Reuters

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© Reuters. An excavator sift by way of dunes of low-grade coal close to a coal mine in Pingdingshan, Henan province, China November 5, 2021. Picture taken November 5, 2021. REUTERS/Aly Song

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By David Stanway

PINGDINGSHAN, China (Reuters) – On the perimeters of an old and depleted mine on the rugged outskirts of Pingdingshan in central China’s Henan province, employees sift by way of dunes of low-grade coal, seeking to extract each last calorie of vitality from town’s crumbling seams.

But regardless of an sudden vitality crunch that left authorities scrambling to ensure coal provides over the winter, it’s nonetheless principally enterprise as typical for Henan’s old mining areas.

“Our workload hasn’t changed,” mentioned Guo Xianguo, 50, a truck driver queuing at a coal depot in japanese Pingdingshan’s Liangbei district.

Coal costs in China surged to report ranges this yr, giving the business a brand new short-term lease of life, with the foremost coal producing area of Inner Mongolia rising each day output by 420,000 tonnes for the reason that starting of October.

But the federal government has been making an attempt to restrain worth rises to assist struggling energy crops construct up stockpiles for the winter, which is predicted to be one of many coldest in years.

While comparatively secure open-cast mines in Inner Mongolia have been given permission to quickly increase, elevating manufacturing elsewhere has proved simpler mentioned than achieved.

Years of depletion, along with powerful environmental and security requirements and lengthening mine development instances, imply that new provides are not available, making China’s coal-dominated vitality construction more and more weak to disruption.

Far from being the securest type of vitality, coal has now grow to be a legal responsibility, analysts say.

“Coal is dominating the country’s energy system in a way that is too rigid and inflexible to respond to market change,” mentioned Yu Aiqun, a researcher with the Global Energy Monitor suppose tank.

The state planning company, the National Development and Reform Commission, didn’t instantly reply to a request for remark.

CRACKDOWNS

Two many years in the past, non-public businessmen throughout China rushed to reap the benefits of an unprecedented growth in coal demand, constructing hundreds of small mines. But the protection report was poor, with common information gadgets on state media about deadly accidents.

China began its large crackdown in 2004, shutting unregulated pits and squeezing non-public operators out of the market. The course of has continued ever since, with giant elements of the sector consolidated into giant, self-contained state-owned “coal production bases”.

From 2017 to 2019 alone, Pingdingshan closed 158 mines – amounting to almost 40 million tonnes of annual manufacturing capability and decreasing its whole variety of working pits to 273.

Annual manufacturing stood at 27 million tonnes by 2019, down from greater than 30 million tonnes 5 years earlier, and the market was now reliant on a small variety of state suppliers.

As costs rose this yr, Henan’s suppliers did attempt to increase output, however their efforts have been deserted after a sequence of accidents, together with one which killed eight miners in June, prompted authorities to droop manufacturing.

“The provincial government didn’t want the accidents to happen during the (Chinese Communist Party’s hundredth) birthday party,” mentioned Yu.

Floods that killed 300 within the provincial capital of Zhengzhou in July additionally took out a number of provide in Pingdingshan and elsewhere. Despite increased costs, total manufacturing within the province has truly declined yr on yr.

After a century of mining that has polluted water provides and scarred the panorama with subsidence and poisonous gangue, Pingdingshan barely has any extra coal to provide.

“Right now, only the big mines are left,” mentioned Guo, the truck driver. “The small mines aren’t producing anymore.”

TO DIG OR NOT TO DIG

Though watched rigorously by safety guards, the piles of surplus coal saved on the depleted hillsides of Pingdingshan have restricted financial worth. What could be offered can solely be utilized in yard workshops or burned for cooking and heating.

“We sell this stuff to the brick factory,” mentioned Zhang Tieliang, a 76-year old farmer poking the rocks with a home-made pickaxe. “This is from the mine, which didn’t want it.”

Nearby, excavators have been scooping up piles of rock and pouring them by way of sieves with the intention to separate the smaller, purer chunks of coal.

Many of Pingdingshan’s mines are depleted, and although substitute capability remains to be underneath development, together with an growth challenge at Liangbei and a newly commissioned mine within the northern district of Xiadian, neither might be prepared in time to reap the benefits of the value surge.

Back in 2019, authorities researchers have been already debating whether or not manufacturing must be expanded and extra coal energy crops constructed with the intention to alleviate potential shortages over 2021-2025.

But consultants say this yr’s shortages show China must speed up its transition to renewables, and pace up reforms to permit electrical energy customers to change extra simply to cleaner energy sources and finish their dependence on coal.

“I’m puzzled as to why there is not a campaign-style push to ramp up renewable energy like we have seen with coal,” mentioned Alex Wang, co-director at UCLA’s Emmett Institute on Climate Change and the Environment.

“Coal reliance makes China vulnerable,” he added. “It’s an energy security problem.”

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