BEIJING, July 24 More than 70 percent of China's
coal firms are making losses, the head of the coal industry
association said on Thursday, with prices eroded by falling
demand growth, a worsening supply glut and a war on smog.
Wang Xianzheng, the chairman of the China Coal Industry
Association, told an industry forum that the problems facing the
coal sector were expected to get worse, official news agency
Wang said the problems had been piling up for the sector
since the second half of 2012, with slowing consumption growth
unable to absorb sustained capacity increases, especially in the
face of rising imports.
He added that more than half of Chinese coal enterprises
were now struggling to pay the wages of their workers.
As part of its war on pollution, China has been trying to
reduce the share of coal in its overall energy mix. It has vowed
to cap total production capacity at 4.1 billion tonnes by 2015,
and has been closing coal-fired power plants in smog-hit regions
Total raw coal production reached 1.85 billion tonnes in the
first six months of the year, down 1.8 percent compared to the
same period of last year, according to data from the National
Bureau of Statistics.
However, while authorities have worked to shut hundreds of
small, unsafe and inefficient mines, many new large-scale mines
are still being built, and analysts expect total annual
production capacity to reach as high as 4.7 billion tonnes by
the end of next year.
At a separate news briefing on Thursday, Huang Libin of the
Ministry of Industry and Information Technology said coal was
one of China's worst-performing sectors this year, along with
steel and nonferrous metals. He said profits in the sector fell
43.9 percent in the first five months.
(Reporting by David Stanway, editing by William Hardy)