China ramps up coal production in bid for energy independence

Amid an energy scramble, China plans to massively increase coal mining, which would decrease its dependence on imports, according to a new Bloomberg reports. The US exported 15.3mn metric tonnes of coal to China in 2021.

The country's National Development and Reform Commission (NDRC), a macroeconomic management agency, which has broad administrative and planning control over the economy of Mainland China, told officials from major mining regions at a previous week's meeting that it wants to boost domestic production capacity by about 300 million tons, sources told Bloomberg.

Bloomberg reports that the NDRC aims to stockpile—setting the target at 620 million tons of fuel—with the coal reserves split between national and local governments, miners, and consumers. The several sectors splitting the build-up include the national government contributing 70 million tons, local governments holding 150 million tons, power plants providing 200 million tons, coal mines would have 100 million tons, and other large users having 100 million tons.

The increase in output capacity would cut China's reliance on foreign imports after global prices have skyrocketed following Russian President Vladimir Putin's invasion of Ukraine. During the war in Eastern Europe, nations have contended with energy superpowers flaunting their influence as costs soar worldwide.

The mining blitz is a reminder that China's dependency on fossil fuels is knee deep as the nation both produces and consumers more than half of the global supply, according to Bloomberg, noting that the country remains the top contributor to greenhouse gas emissions. China has projected that coal consumption should start to taper off in the second half of the 2020s, Bloomberg reported.

China's production would be divided across sources, garnering 150 million tons of capacity coming from new, upgraded operations, plus another 150 million from open-pit mines and some mines that were shut down beforehand.

The day-to-day output should average 12.6 million tons, according to the NDRC, a historic level that breaks previous records reached in the fall following shortages that caused widespread industrial brownouts, Bloomberg reported.

While the NDRC didn't provide a timeline for the beefed-up operations, Bloomberg expects the plan to be enacted swiftly, given the prior year's full-scale push on production. The additional 300 million tons of capacity is equal to China's usual annual imports, with 4 billion tons of its own coal produced in 2021.

The move follows other measures China has taken on bulking supplies. Its power system relies on coal for an approximate 60 percent of its needs, Bloomber says.

During the Russia-Ukraine conflict, China has refused to join Western nations in sanctioning Russia. Over the weekend, US officials said that Russia has since asked China for military aid in the Ukraine war. This comes after US national security advisor Jake Sullivan warned Beijing not to "bail out" Putin by helping Moscow circumvent sanctions that the US and its allies have imposed on Russia.