China To Coal Miners: Raise Production Now

China has ordered 72 coal mines to increase production in Inner Mongolia by nearly 100 million tons. This is amid an energy crisis that has led to factories being shut down and raised fears about a disruption to global economic order.

One trader said to Reuters that this shows the government is serious about increasing local coal production to alleviate the shortage.

China and India have been hit hard by the energy crisis that began in Europe and quickly spread across Asia. This is due to their high energy consumption and dependence on imports.

Media reported earlier this week that China had once again turned to Australian coal to fill the energy security gap. China placed an unofficial ban upon Australian coal imports last year amid a political dispute between the two countries.

China has rescinded power use in at most 20 provinces and regions that make up more than half of its economy. China has increased gas imports to support a price rise that could soon become unheard of.

It remains to be seen if local production can respond quickly to the growing gap between energy demand and supply. The combined production capacity of the 72 mines asked to boost production was 178.45 million tonnes annually. Therefore, the proposed boost of 98.35 millions tons is quite significant.

Beijing is making this the latest effort to ensure sufficient energy supplies for winter. The authorities instructed energy companies to ensure China had enough raw materials to power generation and heating. Bloomberg reported that the message was clear: “Blackouts will not tolerated.”

Blackouts are still possible in China and parts of Europe if the crisis persists, and if forecasts for a colder winter prove to be accurate.