China’s Fastest-Growing Coal Region Shipped 49% More by Rail in January to May Period(Yicai) June 21 -- Xinjiang Uygur Autonomous Region, where coal production is increasing at the fastest pace in China, has bumped up rail shipments of the fuel this year as production climbs.
In the first five months, Xinjiang sent about 35.1 million tons of coal by rail to other regions, a 49 percent jump from a year earlier, according to official data. Logistics are improving as the Lanzhou-Xinjiang Railway added six new freight trains on June 15.
Despite a decline in China’s overall coal production, Xinjiang’s output rose almost 7 percent in the five months and more than 12 percent last month. The growth follows heavy investments in mining capacity in previous years, an executive at a listed coal company told Yicai.
The increase is also related to Xinjiang’s price advantage, said Lin Boqiang, director of an energy policy institute at Xiamen University. Coal mined in Xinjiang is often cheaper compared with that from other regions in the country due to vast reserves and relatively lower extraction costs.
China’s four major coal-producing regions contributed four-fifths of the nation's output last year. Shanxi province ranked first at nearly 1.4 billion tons, followed by Inner Mongolia Autonomous Region, Shaanxi province, and Xinjiang. Xinjiang had the highest growth rate of 11 percent.
From January to May, Shanxi’s coal production fell 15 percent from a year ago. Its output for the whole year could decline by over 70 million tons, according to the provincial plan. The drop is mainly the result of tougher safety standards and lower prices, the executive said.
Inner Mongolia, Shaanxi, and Shanxi have well-established coal mining industries with about 35 years under their belts, Soochow Securities wrote in a recent report. Despite rich coal reserves, it is hard to develop mines in Guizhou, Yunnan, and Heilongjiang so local production may slump.
The brokerage added that Xinjiang has China’s second-largest coal reserves and its costs are low due to easy mining, so the region could boost its supply.
Editor: Emmi Laine
