China signals coal reliance to continue with three new mines
Bloomberg News | February 21, 2022 | 8:53 am Energy China Coal
Image of a coal mine in Inner Mongolia by Herry Lawford, Wikimedia Commons.
China's top planning agency approved three different billion-dollar coal mine projects on Monday as the country continues to support the fuel that much of the rest of the world is shunning.
The National Development and Reform Commission gave the go ahead to two mines in the northwestern province of Shaanxi and another in Inner Mongolia. The three projects will require a total investment of 24.1 billion yuan ($3.8 billion) and produce 19 million tons of coal a year.
The approvals follow a massive surge in mine activity late last year as China boosted production to record levels after fears of an energy shortage sent prices skyrocketing. Each of the projects plans to rely on bank financing for about 70% of the capital involved, a sharp difference from most of the rest of the world where lenders have promised to stop funding new coal mines.
China has ambitious long-term climate goals and world-leading renewable energy industries, but its leaders have placed top priority on energy security and have vowed to continue supporting coal, which still generates about 60% of the country's electricity. While benchmark coal futures in the country have fallen by more than half from an all-time peak in October, they're still 40% higher than they were a year ago.