China's industrial watchdog Friday urged local governments across the country
to make an "overall" liquidation on coal mines that are under construction so as
to step up the structural adjustment of the coal industry.
The National Development and Reform Commission (NDRC) and related departments
announced policies on Friday in this regard, said an official with NDRC, who
asked to be anonymous.
"Construction on coal mines that are being built in violation of concerned
regulations should stop immediately and violators will be punished," said the
official.
"Construction on coal mines that are not in line with the country's concerned
policies and development plans must stop," he noted.
Coal mine projects that have not obtained opening approval, mining license
and environment evaluation report should renew submission report and get
approval before undergoing further construction, the official noted.
NDRC statistics showed that the country's investment in coal mines grew an
average 40 percent from 2003 to 2005.
Currently, China's coal inventory is surging rapidly and coal prices is
tending to fall.
"This indicates some new changes in the coal market," the official said,
pointing out that the coal industry faces increasing overcapacity and oversupply
pressure in the 11th Five-Year Plan (2006-2010) period.
Meanwhile, he added, the industry's accumulated deep-rooted problems have not
been solved fundamentally.
Currently, small-sized coal mines account for 88.3 percent of the country's
total and the mining mechanization is only 42 percent.
Besides, the industry has been plagued by increasing and frequent coal mine
accidents and environment pollution and deteriorating ecological problems.
"The industry should grasp the favorable opportunity provided by the current
oversupply situation to accelerate the adjustment of industrial structure so as
to realize the goal of long-term high quality balance of coal supply and
demand," he said.