Supply-Side Reform of the Coal Industry: Reducing Excess Outdated Capacity and Improving Market Mechanisms

2017-07-12

 

The Coal Strategic Planning Research Institute of the China Coal Research Institute released its latest report in Beijing on July 12, 2017, titled "Key Issues of China's Coal Industry Supply-Side Reform". The report provides an in-depth analysis of the key issues facing China's coal industry and indicates that resolving excess coal capacity is one of the core issues the industry's supply-side reform faces. Other important issues include: coal companies are increasingly in debt as they take on greater leverage; the cost complexity of the coal industry is making it difficult to reduce costs; the coal industry's management system is hindering the industry's marketization; and there is still much work to be done to enhance the industry's scientific management of production. In 2016, the coal industry's work made great strides in reducing excess capacity. Pushing forward this work into 2017 will help to accelerate the elimination of industry accidents, resource depletion, outdated technology and equipment, unsafe working conditions, and non-compliance with coal industry policies. Importantly, the coal industry should focus on eliminating outdated mines with annual production capacity of 300,000 tons or below. The report forecasts that the coal industry can eliminate 150 million tons of capacity in 2017. 

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