Coal news and updates

China to Suspend New Coal Mine Approvals Amid Pollution Fight

China will stop approving new coal mines for the next three years and will continue to trim production capacity as the world’s biggest energy consumer struggles to shift away from the fuel as it grapples with pollution.

China will suspend the approval of new mines starting in 2016 and will cut coal’s share of its energy consumption to 62.6 percent next year, from 64.4 percent now, Xinhua News Agency reported Tuesday, citing National Energy Administration head Nur Bekri. This is the first time the government has suspended the approval of new coal mines, according to Deng Shun, an analyst with ICIS China.

"This new policy, along with efforts to eliminate inefficient mines, may help to ease the severe domestic oversupply,” Deng said by phone from Guangzhou. “But, it will take several years to take effect.”

The country will also close more than 1,000 coal mines next year, taking out 60 million metric tons of unneeded capacity, according to the Xinhua report. China shuttered a similar number of mines this year, wiping out 70 million tons of production, according to a separate statement from the NEA dated Dec. 29. The country is on track to produce 3.58 billion tons of coal this year, down 0.5 percent from 2014, according to the NEA.

Coal demand in China has slid as its economy slows amid a shift toward consumption-led growth and while it intensifies efforts to rein in pollution. China plans to ask companies to replace electricity generated from their own coal-fired plants with renewable energy, the National Development and Reform Commission said last month.

The NEA estimates China next year will consume 3.96 billion tons of coal, 550 million tons of oil and 205 billion cubic meters of natural gas, according to the Xinhua report.

Source: Bloomberg