China should preserve domestic coal resources by increasing imports
China should adopt a policy to import as much coal as possible in the near future in order to boost domestic coal resources and strengthen national security, an energy investment expert said at the China Power & Energy Dialogue, held in Beijing last Friday. “Unrenewable energy resources, like coal, are becoming more scarce everyday, and the profits from investing in coal will rise very quickly in the near future. China should try to preserve its own coal reserves, reduce exports and raise imports,” Zhang Jie, CEO of China Energy Investment Net, said.
“Soaring crude oil prices will cause an increasing number of enterprises to turn to coal as an energy source next year. Moreover, the stable price of electricity in China, along with the coal-electricity tariff linkage, makes thermal power a very promising investment that banks are very willing to grant loans for. Therefore, I think China’s demand for coal next year will rise faster than in 2007,” Zhang explained.
Zhou Xi’an, vice director of the National Development of Reform Commission (NDRC)’s Policy Research Center agreed with Zhang. “In the first half of this year, China’s coal imports surpassed exports for the first time in history. Coal imports can ease the pressure on transportation, as China’s coal reserves are mainly located in northern China, and transportation costs from the north to the south are much higher than import costs. Imports can also relieve energy-saving pressure on local enterprises,” Zhou commented at the Forum on China Energy Sustainable Development, held in Beijing the following day.
However, Zhou added that rising shipping rates have slowed coal imports recently.
According to state-run China Securities Journal, China will import between 150 million and 230 million tons of coal per year by 2010, significantly higher than the previous estimate of 70 million tons per annum. The new prediction is based on a China Coal Industry Association report that China’s annual coal output will grow at the moderate rate of 3.5 percent between now and 2010, increasing the country’s annual coal output by 400 million tons per year to 2.8 billion tons by 2010.
China is set to import approximately 50 million tons of coal this year, mostly through the southern provinces of Guangdong and Fujian, compared to approximately 2 million tons imported per year in the 1990s.
The country imported 38.61 million tons of coal in the first nine months of this year, up 47.6 percent year-on-year.
Tags: coal, import, power