Coal reforms set to deepen

China's coal industry will deepen supply-side reforms during the 14th Five-Year Plan period (2021-25) and focus on upgrading itself, according to a senior official of the China National Coal Association.

Production will evolve toward intelligent, safer, concentrated, customized and environmentally friendly methods.

"Supply-side reforms will be the pivot of the high-quality development of China's coal industry in the next five years, and coal producers need to upgrade and improve their production to better cope with internal and external changes," said Zhang Hong, spokesman of the association, at a recent news conference.

China has so far cut 900 million metric tons of coal capacity, resettled 1 million coal mine employees and restored the balance between coal demand and supply, Zhang said.

That has exceeded the overcapacity reduction goals set for the 13th Five-Year Plan (2015-20), marking better-than-expected achievements in supply-side reforms.

According to the guideline issued by the State Council in February 2016, China aimed to cut coal production by 500 million tons in three to five years starting from 2016, as a marked decline in coal demand had led to a serious imbalance between supply and demand.

The country also determined to reduce or restructure coal production capacity by another 500 million tons during the same period.

Alongside supply-side reforms, intelligent coal mining will be a key technological pillar for high-quality development of the coal industry during 14th Five-Year Plan period, Zhang said.

A government guideline has stressed accelerating intelligent coal mining to improve coal mining safety and coal supply security.

The guideline was jointly issued by eight central government departments including the National Development and Reform Commission and the National Energy Administration in February.

It asked large-scale coal mines and those having suffered disasters to embrace intelligent operations by 2025, with robotics and other forms of automation recommended at key underground positions.

The guideline says surface coal mines should also adopt intelligent operations and unmanned transportation. All types of coal mines should have intelligent operations by 2035.

Through use of technologies like artificial intelligence, the internet of things, big data, intelligent devices, operations like coal stripping, transportation, mine ventilation and production process management can be made intelligent and unmanned so as to increase efficiency and worker safety, according to the guideline.

Zhang said during the 14th Five-Year Plan, large-scale coal mines will resort to professional service providers for employee hiring and discharge, as employee settlement has proved to be a challenge sometimes for the shutdown of old and small-scale coal mines during supply-side reforms.

Coal mines also need to change their mindset to retain clients as it will be difficult to get new orders merely by slashing product prices, because coal consumption will likely enter a stagnant period during the 14th Five-Year Plan period, against a background that China pledges to hit peak emissions before 2030 and achieve carbon neutrality by 2060, Zhang added.

"Customized supplies of coal and thinking ahead of customers to provide them what they really need will be key for coal mines to develop," he said.

Besides, low-carbon efforts by coal mines are key for China's environment protection because coal capacity alongside the Yellow River, an important ecological shelter zone, accounts for 75 percent of the national total, he added.

He also said it is important for coal companies to group together coal mining and related industries, such as coal chemicals at one single site, to reduce logistics and other costs and improve efficiency.