China expands the cessation of coal mining production, prices soar higher and higher?

ILLUSTRATION. A worker works at a coal mine on the outskirts of Tangshan, Hebei Province, China, December 9, 2005. Prices Coal prices soar higher following high demand from China. REUTERS/Jason Lee.

Source: Bloomberg | Editor: SS Kurniawan

KONTAN.CO.ID – China has expanded the shutdown of coal mines in Shanxi Province, a major producer of the commodity, after heavy rains hit the area in the past week. Coal prices soaring higher and higher?

Quotes Bloomberg, Shanxi Province suspended the production of 60 coal mines, the Shanxi Government said in a statement on its official WeChat account on Saturday (9/10).

Heavy rains early last week caused landslides in many cities in the province, causing fatalities, according to the Shanxi Government, without providing further details.

The disaster sparked a response that also saw work at 1,035 construction sites halted and 166 tourist attractions closed in the region, the Shanxi government added.

The latest suspension follows the shutdown of 27 coal mines in the North China province on October 4.

Read also: Demand will soar, bad weather forces dozens of coal mines in China to close

The shutdown of coal mines in Shanxi added new pressure on China, which is already struggling with an energy crisis that has led to electricity rationing for factories and even caused blackouts in residential areas.

Previously, Shanxi Government officials pressured mining companies to increase production, allowing them to continue production even after reaching their annual quota.

Heavy rains in Shanxi are another extreme weather event to hit China this year, after torrential rains and floods in Henan Province in July killed more than 300 people.

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The Shanxi government also said it had allocated 20 million yuan (US$3.1 million) for disaster relief, and had distributed supplies including tents and blankets to support flood-affected residents.

For information, the Indonesian Reference Coal (HBA) price rose to US$ 161.63 per metric in October 2021, the highest in the last decade.

The driver of HBA is the increasing demand for coal in China due to the increasing demand for power generation that exceeds domestic supply capacity.


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