Shanxi, China’s largest coal-producing province, has urged coal producers to impose stricter flood safety precaution measures such as enhanced drills and inspections amid heavy rainfalls. These measures are expected to curb coal output during the peak demand season when utilities ramp up purchases for restocking to meet higher power consumption in the summer.
Some areas in South China have experienced the worst flooding in three decades following weeks of heavy rain since early last month. Shanxi is located in North China, where the floods have been less severe compared to the southern part of the country. However, there are rising concerns that coal mines could be exposed to floods following heavy rainfall in the past weeks.
Shanxi’s coal mine safety administration reminded producers of the 1996 incident when flooding killed 33 mine workers in the province. Earlier this month, a coal mine suffered from a power blackout due to heavy rain.
Domestic supplies become more important for China’s utilities now as their quotas to import coal are curbed. However, significant coal shortages are unlikely in China as Inner Mongolia, the country’s second-largest coal producer is set to increase output from the Ordos region. Inner Mongolia lost its top spot to Shanxi based on January-June output data amid a corruption investigation since May that curbed production, but the probe has come to an end.
However, higher water levels due to the heavy rainfalls have increased China’s hydropower output, which can put pressure on coal consumption despite higher power demand. Data from the state-backed coal transportation and distribution association (CCTD) showed hydropower output rose 6.9% year-on-year to 12.15 TWh in June.
