Will the suspension of approval of coal mines with production capacity below 1.2 million tons/year affect the increase in production and supply guarantee?

Recently, the Ministry of Emergency Management and the State Mining Safety Supervision Bureau issued a notice on the "14th Five-Year Plan for Mine Safety", which clearly proposed to strictly enforce mine safety access and stop approving coal mines with production capacity of less than 1.2 million tons/year after the construction and expansion of Shanxi, Inner Mongolia and Shaanxi. Regarding this,coalMany people in the industry have asked whether the suspension of approval of coal mines with production capacity below 1.2 million tons/year will affect the current increase in production and supply guarantee?

(Source: WeChat public account "Fengmeng Coal Logistics" ID: mtwl888 Author: Hao Gang, Today's Think Tank)

Today's think tank found that in fact, as early as April 2020, the "National Three-Year Action Plan for Special Production Remediation" issued by the State Council Safety Committee, in terms of coal mine safety access, the restrictive indicators and regulations of coal mines have been fully consistent with the notice document. The following aspects are examples:

1. Stop approval of coal mines with production capacity less than 1.2 million tons/year after construction and expansion in Shanxi, Inner Mongolia and Shaanxi, coal mines with production capacity less than 600,000 tons/year after construction and expansion in Ningxia, and coal mines with production capacity less than 300,000 tons/year after construction and expansion in other areas.

2. Stop approval of coal and gas outburst coal mines with production capacity less than 900,000 tons/year after new construction and renovation.

3. Stop approval of new large and medium-sized coal mines with mining depths exceeding 1,000 meters and expansion of mining depths exceeding 1,200 meters, and new and expansion of other coal mines with mining depths exceeding 600 meters.

4. Stop approval of new and renovated coal and gas outburst coal mines with production capacity of more than 5 million tons/year, and new and renovated high-gas coal mines and impact ground-pressed coal mines with production capacity of more than 8 million tons/year.

Obviously, the suspension of approval of coal mines with a production capacity of less than 1.2 million tons/year mentioned in the document, which has been suspended from approval of new construction and renovation in Shanxi, Shaanxi and Mongolia areas, after the construction and expansion of new construction and expansion in Shanxi, Shaanxi and Mongolia, has already begun to be implemented in 2020. In contrast, the continued tight domestic coal supply and the continued policy of increasing production and ensuring supply are hard to say that it has nothing to do with the previous increase in the elimination of backward production capacity and the suspension of approval of small-capacity mines.

However, we should also see that in recent years, the intelligent construction of large mines in major coal-producing areas has made rapid progress, and the release of their advanced production capacity has also been further strengthened. The state has stopped approving coal mines with a production capacity of less than 1.2 million tons/year after the construction and renovation of Shanxi, Inner Mongolia and Shaanxi, with the intention of emphasizing the coordinated driving force of increasing production and ensuring supply and safe production.

It is not difficult to find that behind the policy, the clear direction of "focusing on the big and letting go of the small, gathering resources, and paying equal attention to production safety." Various resources gather in large mines, which brings about the accelerated release of advanced coal production capacity and the continuous increase in the safety production coefficient. Therefore, stopping the approval of small-capacity mines may affect the overall supply capacity of the coal market in the short term, but in the long run, it will be more conducive to accelerating the release of advanced coal production capacity and further improving the level of high-quality development of the coal industry.