China’s Inner Mongolia region starts construction of coal mine

BEIJING/SINGAPORE: China’s Inner Mongolia region started construction on Friday of a coal mine with an annual capacity of 8 million tonnes, media reported, as China boosts its coal-mining potential.

The mine, near Ordos city in the northwestern region, was approved by the state planner last year.

Analysts expect China to add the capacity to produce 89 million tonnes of coal this year, following about 300 million tonnes of new coal capacity in 2022.

The 9.67 billion yuan ($1.40 billion) mine is backed by state-owned Huaibei Mining Group as well as Chery Holding and Erdos Energy Investment and Development, according to the Anhui Daily newspaper.

A coal processing plant will be built together with the mine, the newspaper said. China is encouraging the rapid growth of coal production to build stocks at power plants and reduce the threat of electricity shortages that have brought major blackouts in recent years.

However, growth in coal consumption is set to slow as China economy grows more slowly and it increasingly adds renewable power to its energy mix, raising questions about a surplus of coal mining assets in the near future.