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Shanxi faces triple threat
By Yu Tianyu (China Daily)
Updated: 2008-09-01 17:44

Shanxi faces triple threat

One of China's largest coal producing regions, Shanxi province, is facing a triple threat of power and coal shortages, coupled with rising coal prices.

Shanxi's coal shortage, which is expected to escalate to as high as 200 million tons, is largely due to the huge coal demand across China, experts say.

Coal prices have also soared, making life difficult for buyers such as Zheng Wei, manager of a power plant in Jiangsu province who has been in Shanxi for two months looking for coal.

Zheng's plant owned by one of China's top five power generation companies, consumes about 10,000 tons of coal a day when it is operating with its full capacity. But now, he says one power generation unit has been shut down due to the coal shortage.

Zheng says in the past two months, he has bought 100,000 tons of coal, equal to a 10-day consumption of his plant.

Zheng adds that in Jincheng, a city in southeast Shanxi, there are at least 100 people looking for coal and bargaining with mine owners like he is doing.

"Although we have coal supply contracts with some mines in Datong, it is far less than enough," Zheng says, " I has tried my best to persuade mine owners to sell us more."

Soaring price

Coal companies in Shanxi have all increased their prices. In the first quarter, the average coal price of the province's five leading companies stood at 377 yuan per ton, an increase of 13 percent over a year earlier, according to local statistics.

In 2007, the standard coal price increased 62.7 yuan per ton year- on-year, and this year the price has seen a 104.4 yuan increase per ton in the first quarter, and 70 to 80 yuan rise per ton in the second quarter, according to Shanxi Province Electric Power Association (SEPA).

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