With the deepening of structural reform on the supply side, the coal industry has steadfastly removed its overcapacity, and the power of “combination” policy has become apparent. It not only promotes the basic balance of supply and demand in the market and improves the efficiency, but also promotes the development quality of the whole industry. In the first 11 months of 2017, the total profits of the whole industry increased by 3.6 times compared with the same period last year, and the task of overcapacity removal is expected to be completed basically or ahead of schedule in 2018. The next step will be turning to structural optimization of production capacity to achieve a dynamic balance between supply and demand.

The number of small coal mines with capacity of 300,000 tons or less has been reduced by nearly half. The number of coal mines in China has been reduced from 108,000 in 2015 to about 7,000. The total profit of the whole industry has increased by 3.6 times over the same period last year. In 2017, the coal industry handed over a bright report card. In this year, the coal industry, once mired in excess capacity, continued to firmly grasp the main line of structural reform on the supply side, steadfastly pushed forward a series of work to reduce production capacity, and fully implemented “combination” policy, which not only promoted the basic balance of supply and demand in the market and improved efficiency, but also promoted the quality of development of the whole industry.

The Effect of Overcapacity Removal Becoming Apparent

According to data released by the National Bureau of Statistics, in the first 11 months of 2017, the total profit of coal mining and washing industry reached 27.76 billion yuan, an increase of 364% over the same period last year. The benefit of coal industry has obviously improved, which was a bright spot of coal economic operation in 2017. There were two reasons for the recovery, on the one hand, due to the sustained improvement of macro-economy, the overall performance exceeded market expectations, which supported the rise of coal and other commodity prices; on the other hand, it was closely related to the sustained promotion of structural reform on the supply side in China.

Coal industry is one of the key industries to remove overcapacity. The State Council issued the document “Opinions on Removing Overcapacity and Realizing Out-of-Difficulty Development in Coal Industry”, and established the inter-ministerial joint meeting system. Relevant departments have studied and promulgated a series of supporting policies and measures, the governments of major coal-producing provinces and regions have actively promoted them. Coal enterprises, especially large-scale coal enterprises, have earnestly implemented policies and measures for overcapacity removal and out-of-difficulty development. 

Through unremitting efforts, the overcapacity of coal has been effectively resolved. Since 2016, the number of small coal mines with capacity of 300,000 tons or less has been reduced by nearly half. By the end of 2017, the number of coal mines in China will be further reduced from 108,000 in 2015 to about 7,000. In the first 11 months of 2017, the coal industry achieved a total revenue of 2355.39 billion yuan, an increase of 29.4% over the previous year.

WANG Xianzheng, President of China Coal Industry Association, said that with the deepening of structural reform on the supply side of the coal industry, the gradual release of high-quality production capacity, the elimination of backward production capacity and the quickening of the construction of coal transport corridors, the supply-demand relationship in the national coal market is developing from a basic balance to a higher level of dynamic security. Moreover, on the basis of the increase of national coal production and price rebound, the improvement of coal economic operation quality and benefit lay a foundation for the coal industry to remove overcapacity, relieve difficulties and achieve transforming and upgrading development.

As a whole, the task of overcapacity removal is expected to be completed basically or ahead of schedule in 2018, but the relatively backward production capacity of the coal industry is still relatively large, and the task of structural overcapacity removal is still arduous.

“We must gradually shift from total overcapacity removal to structural optimization of production capacity, from retreat to advance and retreat. By increasing advanced capacity in an orderly manner, backward capacity can be retreated as soon as possible. We can optimize the allocation of stock resources, expand high-quality incremental supply and achieve a dynamic balance between supply and demand”, said ZHAO Chenxin, Director-General of the Economic Operation Regulation Bureau of the National Development and Reform Commission.

Industry Acceleration “from Black to Green”

In recent years, the development of the coal industry has been facing greater pressure. WANG Xianzheng pointed out that the energy resource feature of China is lacking oil and gas, and the coal as the reliable resources, with the low price and the cleanliness of utilization has determined that it will still guarantee the secure and stable supply of China’s energy in the future. The energy strategy of “coal-based, diversified development” and coal as the primary energy pattern will not change.

WANG Jinhua, Chairman of China Coal Science and Technology Group Co., Ltd. and Director of the Coal Science Research Institute, also believes that coal, as the main energy source in China at present, is expected to account for 50% of primary energy in 2030, and will still be the cornerstone of the stable development of the national economy in the medium and long term.

Making a good job of coal is an inevitable choice to ensure the safe and stable supply of energy in China. Promoting the green mining and consumption of coal is the only way to make a good job of coal, which is related to the sustainable development of coal industry and the overall construction of ecological civilization. “It is imperative to transform coal into a clean, green and low-carbon energy. Therefore, we must rely on scientific and technological innovation to promote the development and application of Internet, big data and intelligent technology, so as to realize the direction of intelligent green development and clean and efficient utilization of coal resources” said WANG Jinhua .

In recent years, China Coal Technology and Engineering Group has made a number of breakthroughs in the fields of intelligent green development of coal, clean and efficient conversion and utilization of coal, and ecological environment protection in mining areas. From the perspective of the whole coal industry, the technological achievements of promoting the green development of the coal industry are also “remarkable”. For example, in the field of green mining, a group of 10 million-ton mines, represented by Daliuta and Hongliulin coal mines, and a group of digital mines and intelligent mining faces represented by Jinjie and Huangling No. 2 pit have been built. The main economic and technological indicators have entered the ranks of the international advanced level.

In terms of green consumption, China has made considerable progress in technology and equipment fields such as ultra-low emission and high efficiency pulverized coal fired boilers in coal-fired power plants, coal water slurry, briquette, modern coal chemical industry, lignite upgrading, etc. After the technical transformation of ultra-low emission in coal-fired power plants, the emission indexes of major atmospheric pollutants such as soot, sulfur dioxide and nitrogen oxides are lower than those of natural gas power plants. The technology of high efficiency pulverized coal industrial boilers with independent intellectual property rights of China makes the burnout rate of fuel up to 98%, which is 28 percentage points higher than that of ordinary coal-fired boilers, and the emission index of main air pollutants meets or approaches the emission standard of natural gas boilers.

“The coal industry will continue to implement new development concepts, strive to seize the commanding heights of world coal science and technology competition, strive to promote the transformation of coal from fuel to fuel and raw materials, promote the transformation of coal from traditional energy to clean energy, and form a safe, efficient and clean modern coal supply guarantee system.” WANG Xianzheng said.

Continue to improve supply quality

The China Coal Industry Association predicts that in 2018, the structure of coal supply will continue to be optimized, the basic situation of overcapacity and oversupply of coal market will remain unchanged, and the supply of coal market will gradually become easing.

WANG Xianzheng said that the coal industry should deepen the structural reform of the supply side, deepen the innovation of ideas, technologies and modes, upgrade and transform the old kinetic energy, cultivate and develop new kinetic energy, promote the transformation of the development mode of the coal industry from production-oriented to production-service-oriented, and realize the transformation and development of coal from traditional energy to clean energy, building a modern coal economy.

In terms of scientific and technological innovation, it is necessary to speed up the establishment of a technological innovation system with enterprise as the mainstay, market-oriented, and deep integration of production, education and research, and promote the transformation of scientific and technological achievements into real productive forces; and it is necessary to take safe, efficient, green and intelligent mining and clean, efficient and low-carbon intensive utilization as the main research direction, take coal intelligent mining as the lead by breaking through major basic theories and key common technologies, improve the manufacturing level of coal machinery and equipment, speed up the popularization and application of high and new technologies, strengthen the research of new technologies, new technologies and new uses in downstream coal industry, innovate the cooperation mode of science and technology between upstream and downstream coal industry, form innovative synergies, and lead the coal industry to the high end of the value chain, transform to technology-intensive development and promote the transformation of coal from traditional energy to clean energy.

In terms of promoting clean and efficient utilization, on the basis of promoting all raw coal to be prepared (washed), it is necessary to accelerate the technical transformation of ultra-low emission of coal-fired power plants; promote clean utilization of bulk coal according to local conditions; promote the industrialization of modern coal chemical industry, build a number of large-scale coal chemical projects in an orderly manner, and explore the direction and model of industrialization development, build a modern coal chemical industry system based on coking and deep processing of coal.

In terms of innovation and development of new formats and new models,  it is necessary to respect market and enterprise development rules and take the road of diversification, high-end and high-efficiency development; it is necessary to further promote the integration of coal-electricity integration, coal-coke integration, coal chemical industry, coal building materials, modern logistics, financial services, e-commerce and other industries, to achieve the coordinated development of the main coal industry and related industries.

From China Economic Network - “Economic Daily”