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China’s top coal province Shanxi to cut output for first time in seven years

China’s top coal-producing province of Shanxi plans to reduce output for the first time in seven years, a local government work plan shows, after closures linked to a series of fatal mining accidents and as weak demand led to a fall in prices.

Shanxi’s coal output will reach 1.3 billion metric tons in 2024, according to a Sunday post on the provincial government’s WeChat account. That would be down 4% from last year’s 1.36 billion tons.

Shanxi, which mined 29% of China’s coal last year, will voluntarily reduce output for the first time, according to a report in state-run media outlet Xinhua.

“China’s energy-rich provinces are experiencing a profound transformation in their industrial structure and energy mix as they strive for high-quality growth,” Xinhua said.

China’s coal market is largely oversupplied in part because weakness in the property sector has reduced demand for coal in steel and cement manufacture.

Mining accidents, meanwhile, shut down some production in the first quarter, although that output was in part restored by late March.

Shanxi’s work plan called for stable production, including maintaining operations during holidays and major events and avoiding widespread mine shutdowns after accidents.

As a result of the disruption, Inner Mongolia overtook Shanxi to become China’s top coal producing province. Inner Mongolia’s production was up 1.7% year-on-year, while Shanxi’s fell 18.1%, dragging overall production down by 4.2%, statistics bureau data showed.

In February, coal miners in Shanxi were asked to reduce output and carry out safety checks from March to May.

An industry group has forecast China’s overall coal output will be about 1% higher in 2024, just topping last year’s record high of 4.66 billion tons.

By Colleen Howe

Source: Reuters