A coal mine in Dazhu county in China’s Sichuan province was flooded on July 20, a day after the country’s coal mine safety administration issued renewed calls for producers to take flood precautions during this year’s peak rainy season which has been seen as the most severe flooding season in more than three decades. This is expected to prompt stricter mine inspections that may potentially slow an increase in China’s coal output which is needed to build stocks for demand in the summer.
Heavy rains, which have battered South China since early last month, are now moving toward China’s coal production centres in the northern parts of the country. Chinese authorities had to blow up a dam in Anhui province as an effort to ease flooding. The floods have disrupted economic activity in south China, with estimated economic losses of more than $8 billion.
The rising waters also boost hydropower output to a record high in some Chinese provinces, which will likely dampen coal consumption. Rising temperatures in China’s coastal regions should give support to coal demand, but the increase will be capped if enough hydropower can be efficiently transmitted to these areas.
