A significant disruption in coal supply is advancing in China as heavy floods forced widespread mine shutdowns in the core production region.
Shanxi province, China’s primary coal source, has had to cease operations at 60 coal mines, in addition to 372 non-coal mines and 14 dangerous chemical factories, local officials said on Oct. 9, according to Bloomberg.
The Northern province was struck with torrential rain over the past week, which led to heavy floods, landslides, and collapsed houses. BBC reported the extreme condition had affected more than 1.76 million citizens.
Shanxi already closed 27 other coal mines on Oct. 4 also under pressure of challenging weather.
This further closure is expected to put more strain on China’s power generating capacity, that’s critically dependent on coal supply.
The electricity crisis allegedly stems from Beijing’s reform regulations to reduce power prices, South China Morning Post explained.
Because of the crisis, the Chinese Communist Party (CCP) resorted to boosting coal mine output last week, enabling production to continue even after they had met their yearly limits, Bloomberg said.
China is re-evaluating the embargo on Australian coal and unofficially accept shipments from the country, with Financial Times reporting up to 450,000 tonnes of thermal coal being delivered.
Nonetheless, even before the latest operation halt, China was already expected to face a coal supply deficit of 30 to 40 million tons over the final three months of this year.
Experts are not positive that accelerating coal production will play any significant role. Reuters reported they believed coal output would not meet the demand this winter, and that a near 12% decrease in industrial power use in the fourth quarter was still imminent.
Coal and power supplies are essential especially during the cold season due to increased heating demand.