Capping coal output to cut dependence


CHINA aims to cap annual coal production at 3.9 billion tons by 2015 to curb reliance on the dirtier fuel which will remain China's main source of power in the foreseeable future.

The target, unveiled in a five-year plan for the coal industry which was released yesterday, implies an annual growth of 2.6 percent from last year's output of 3.52 billion tons. The output had soared 38 percent in the five years through 2010.

Coal as a proportion of China's primary energy mix will fall sharply over the five years though demand will keep rising amid industrialization and urbanization, said the plan by the National Development and Reform Commission.

It will be "appropriate" for China to limit coal consumption at 3.9 billion tons by 2015, the NDRC said. Analysts said that this cap will give China room to boost imports of the fuel for which it's the world's largest producer.

Under the plan, China will encourage imports of coal, especially in coastal areas, and support companies to purchase coal assets overseas.

It also said China aims to add new output capacity of 750 million tons per year by 2015, bringing the total to 4.1 billion tons annually.

The mines in the western areas, which include Xinjiang, Shaanxi and Gansu, will be the main growth driver while traditional coal-producing areas like Shanxi and Inner Mongolia will see slower growth, Tebon Securities analyst Zhang Fan said.


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