Less than four months into a coal output surge ordered by Beijing to paper over the cracks in China’s electricity grid, the signs of strain are starting to show.
Emergency rescue services were rushed to an illegal coal pit in Shanxi province in mid December after 22 miners were trapped underground by flooding, one of the country’s worst mine accidents in months. The same province, the heart of China’s coal belt, has ordered mines operated by Jinneng Holding Power Group Co. to halt production after 54 of them were found to be operating in excess of their agreed capacity, CCTV News reported.
Shortages of solid fuel in September drove coal prices to 1,982 Chinese yuan ($311) a metric ton, causing power cuts across the country as utilities refused to sell electricity at a loss. In response, Beijing ordered a drastic ramp-up of output to replenish depleted stockpiles and bring costs down.