China
approves massive new coal capacity despite pollution fears
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Beijing approves 15 new large coal mining projects over year
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Total new capacity, including small mines, likely to be higher
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Capacity to increase by 860 mln T over 2011-2015 period
7
January, 2014
BEIJING,
Jan 8 (Reuters) - China approved the construction of more than 100
million tonnes of new coal production capacity in 2013 - six times
more than a year earlier and equal to 10 percent of U.S. annual usage
- flying in the face of plans to tackle choking air pollution.
The
scale of the increase, which only includes major mines, reflects
Beijing's aim to put 860 million tonnes of new coal production
capacity into operation over the five years to 2015, more than the
entire annual output of India.
While
efforts to curb pollution mean coal's share of the country's energy
mix is set to dip, the total amount of the cheap and plentiful fuel
burned will still rise.
According
to data compiled by Reuters, the National Development and Reform
Commission (NDRC), China's top planning authority, approved the
construction of 15 new large-scale coal mines with 101.3 million
tonnes of annual capacity in 2013.
"Given
that China's total energy consumption is still growing along with the
economy, then coal production will continue to grow," said Helen
Lau, senior commodities analyst with UOB Kay Hian in Hong Kong.
"While
China is trying to foster consumption from other sources like hydro
and nuclear, we expect actual coal production to grow 2-3 percent a
year in the next five years."
Chinese
coal production of 3.66 billion tonnes at the end of 2012 already
accounts for nearly half the global total, according to official
data. The figure dwarves production rates of just over 1 billion
tonnes each in Europe and the United States.
Much
of China's new capacity is in regions like Inner Mongolia and
Shaanxi, reflecting a strategy to close small mines in marginal
locations like Beijing and consolidate output in a series of huge
"coal industry bases" that will deliver thermal power to
markets via the grid.
While
expanding output at such bases, China has shut more than 300 million
tonnes of old capacity in the last decade, but critics say new mines
are rapidly outpacing closures and the policy merely shifts China's
environmental problems elsewhere.
"Despite
the climate change pressure, water resource scarcity and other
environmental problems, the coal industry is still expanding fast in
northwest China," said Deng Ping, a campaigner with
environmental group Greenpeace in Beijing.
"The
scale of these coal bases has been rarely seen in other places in the
world, with open-cast coal mines, coal power plants, and coal
chemical plants all combined together."
The
new projects involved a total investment of 54.1 billion yuan ($8.9
billion). In 2012, the administration approved just four coal
projects with 16.6 million tonnes of annual capacity and a total
investment of 7.8 billion yuan.
The
list of approvals does not cover all mines launched in 2013, with
many smaller projects under the purview of local authorities and not
the central government. According to rules issued in December, coal
mines producing more than 1.2 million tonnes per year need Beijing's
go-ahead, while local governments can approve the rest.
It
takes the NDRC months to announce new mine approvals, so other
projects may have been passed in the fourth quarter. One 46
million-tonne mine was approved in December but the NDRC has yet to
publish details.
An
NDRC spokesman was not available to comment.
TACKLING
SMOG
With
major cities hit by smog last year, the government has promised to
ease its dependence on coal, a major source of air, soil and water
pollution as well as climate-warming emissions.
It
has issued guidelines to restrict mining in residential areas,
improve quality and reduce overcapacity.
But
coal is cheaper than all the alternatives and China is the world's
biggest producer as well consumer. It is also far more reliable than
intermittant energy sources like hydropower or wind.
The
2011-2015 plan said around 860 million tonnes of new coal production
capacity will be brought into operation, as well as 300 more
gigawatts of coal-fired power, twice the total generation capacity of
Germany.
While
Beijing said in September that it would cut the share of coal in its
primary energy mix to "less than 65 percent" by 2017, down
from 66.8 percent in 2012, consumption will still rise in absolute
terms, with total energy demand set to grow 4.3 percent a year over
the 2011-2015 period.
"The
replacement of coal hasn't been as fast as expected, and other
sources of energy are not only expensive but also face a lot of
technical and environmental problems," said UOB's Lau.
The
government's 2011-2015 energy plan put coal production capacity at
4.1 billion tonnes by 2015, but Lau said it may be much higher.
"We
estimate China's total coal production capacity will be 4.7 billion
tonnes by 2015 - I think the government figure is a big
underestimation."
shanbe,
capital of the Central Asian republic of Tajikistan
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