China’s Coal Industry Must Follow the Path of Sustainable Production Capacity

By Xie Heping
President of Sichuan University, Academician of the Chinese Academy of Engineering
Liu Hong
Energy Research Institute, National Development and Reform Commission
Wu Gang
Sichuan University

In the last 10 years, affected by strong market demand, China’s coal output has continued to increase and its production capacity has expanded at an unprecedented rate, with an annual increase in production of 200 million tonnes on average. In 2012, the total output of coal reached 3.66 billion tonnes. However, based on China’s existing coal mining technologies, this level of output greatly exceeds the sustainable coal production capacity in terms of resources, the environment, and safety. Behind this huge production statistic are excessive waste of coal resources, a large number of casualties among workers, and serious damage to water resources and the environment. These problems are the basis of resistance for the continued development of China’s coal industry.

Sustainable Production Capacity

A longwall mining system can be employed during highly mechanized mining

According to our latest research, which comprehensively examines the various constraints of resources, technology, environment, safety, etc., sustainable capacity for China’s coal mining is only around 1.1 billion tonnes, approximately one- third of current total coal production. In other words, due to limited resources, poor geological mining conditions, natural disasters, environment-based restrictions, and water limitations, only one-third the rate of current coal production in China can be considered rational; the other two-thirds exceeds sustainable capacity and can be considered over-exploitation.

China’s Maximum Sustainable Coal Production Capacity Under Constraints

Although China is rich in coal resources, based on the current massive production rates, every step to enhance the production capacity will be subject to constraints from many unfavorable factors. First, coal production capacity is constrained by resource reserve conditions. Coal resources buried at a depth of 1000 m account for 53% of China’s total reserves. After long-term large-scale exploration, shallow coal resources in the key coal production areas have been depleted, leaving an average mining depth of approximately 600 m. Coal exploration becomes more difficult as the mining depth increases, plus there is also a lag in technology. Therefore, the problems associated with deep mining will increase.

Second, coal production is constrained by safety. Some coal fields in China are more difficult to mine because of their complicated geological structure and high gas content, which leads to frequent mining accidents. The annual death toll in China’s coal production accidents has exceeded 2000, which is the highest in the world in terms of mortality rate per million tonnes. Especially in northern China, the coal fields have inherent safety risks due to the serious threat from the Ordovician limestone water at the bottom of the coal bed.

Third, coal production is constrained by the environmental impacts of mining (i.e., environmental capacity). The hydro- geological conditions and ecology in most of China’s coal-rich regions are fragile because of severe soil erosion, frequent geological disasters (i.e., mudslides, landslides), and low vegetation cover. With further mining exploration, the environment near the mines will be subject to more serious damage, which could result in a considerable threat to the social development and quality of life for the residents in mining regions.

We have conducted a regional analysis to calculate the sustainable production capacity limit under the major constraints of the environment, water resources, geological mining conditions, and safety.

In terms of environmental constraints, due to the fragile ecology of Shanxi, Shaanxi, Inner Mongolia, and Ningxia, the coal production capacity in these regions should be limited to 2.1 to 2.2 billion tonnes. In southwest China, where the use of high-sulfur coal is restricted, the production of middle and low- sulfur coal is approximately 300 million tonnes. Considering the overall situation, the annual mining capacity under the environmental constraints in China should be 4.2 billion tonnes (i.e., equivalent to 3.0 billion tonnes of standard coal).

Coal exploitation is extensive in Shanxi, Shaanxi, Inner Mongolia, and Ningxia. However, due to water shortages in these areas, production capacity should be limited to 2.4 billion tonnes. Water resources have little impact on the sustainable production capacity in other regions, which amounts to 1.9 billion tonnes. Therefore, taking into consideration the constraints from water resources in China, the annual sustainable mining capacity is 4.3 billion tonnes (equivalent to 3.1 billion tonnes of standard coal).

With respect to the occurrence of resource reserves and constraints related to mining conditions, a considerable portion of coal resources are inappropriate for large-scale mechanized production. The mining capacity suitable for mechanized exploitation is approximately 4.7 billion tonnes (equivalent to 3.4 billion tonnes of standard coal); 3.5 to 3.8 billion tonnes (equivalent to 2.5–2.7 billion tonnes of standard coal) of annual capacity are available for high-efficiency mechanized exploitation.

In term of safety, which is determined by geological mining conditions, water resources, and technology, the annual mining capacity in China should be 3.5 billion tonnes (equivalent to 2.5–2.7 billion tonnes of standard coal). Safety during coal mining poses the largest constraint to coal production expansion.

Based on the above analysis, we propose that China’s maximum annual coal production capacity should be limited to 3.8 billion tonnes (equivalent to 2.7 billion tonnes of standard coal) to maintain the healthy and sustainable development of China’s coal industry. See Table 1 for the detailed data on sustainable production capacity based on the various constraints.

Sustainable Production Capacity Table 1

Table 1. Maximum production capacity of China’s coal resources under constraints (units: million tonnes)

A Standard System to Define Sustainable Coal Mining Capacity in China

Our definition of sustainable coal mining capacity refers to the maximum coal mining capacity that can be achieved using safe, highly efficient, and environmentally friendly methods under the premise that the coal reserves can be sustainably mined for a specific time period. Based on the requirements to sustain production capacity under the constraints determined based on resources, safety, technology, the environment, and equipment, we set up an assessment index system to evaluate sustainable production capacity. Three indexes are proposed to define sustainable mining capacity: safety, environment (i.e., green), and mechanization. This assessment system consisted of preparing a hierarchy of metrics, referred to as grade-A and grade-B indexes, wherein the grade-A indexes are primary indexes and the grade-B are secondary indexes. Figure 1 lists the 12 grade-A indexes; there are also 22 grade-B indexes that are not shown.

Sustainable Production Capacity

Figure 1. Assessment index of the sustainable coal production capacity

Safety

The safety level refers to the degree of safety and health protection for coal miners in the process of production and operation, placing an emphasis on a low accident rate, low incidence of occupational diseases, and guaranteed occupational safety and health in accordance with the “people-oriented” development concept. This index contains four grade-A indexes and seven grade-B indexes.

Environment

The environmental (i.e., green) level refers to the degree of protection provided to the environment in and around the mining areas during coal production. The environment level is based on complying with environmental regulations and addressing the environmental problems caused by traditional mining processes. It requires achieving the environmental benefits associated with a high recovery rate of coal resources, while minimizing the overall impact to the environment. In addition, the environmental level is characterized by the simultaneous extraction of other resources without negative environmental impacts. This index contains four grade-A indexes and eight grade-B indexes.

Mechanization

The mechanization level refers to the degree of utilization of the most efficient mining mechanization appropriate for the specific geological conditions. The mining mechanization level emphasizes efficient mining and the overall production efficiency rate, widespread use of technology and improvement through analytical assessment, and better equipment adaptability. This index consists of four grade-A and seven grade-B indexes.

Using our assessment system, we completed a comparative study on the sustainable capacities of coal mining, ranking the world’s major coal mining countries. The results are provided in Table 2.

Sustainable Production Capacity Table 2

Table 2. Comparison of sustainable coal mining capacity between China and the advanced coal mining countries in the world

Scale and Regional Distribution of Sustainable Coal Mining Capacity in China

According to the assessment system, we estimated the sustainable coal mining capacity in China, including a breakdown of the major coal production areas, and came to the conclusion that the current sustainable production capacity in China is approximately 1.1 billion tonnes, that is, approximately one-third of the current national annual output.

In addition, we developed a preliminary forecast for potential improvement of China’s sustainable coal mining capacity in the future. By 2030 it is projected that the sustainable coal mining capacity in China’s existing mines could increase to 1.50–1.63 billion tonnes. Sustainable coal mining capacity in new mines may reach 1.58–1.89 billion tonnes by a conservative estimate, or up to 1.90–2.11 billion tonnes based on an optimistic estimate. The total sustainable capacity of coal mining in 2030 is estimated to be 3.0–3.5 billion tonnes, which can basically meet the projected coal demand in China at that time. After 2030, China’s annual coal demand is not expected to increase or change dramatically, so the total sustainable coal production capacity will be maintained at approximately 3.0–3.5 billion tonnes.

According to our analysis of major coal mining regions within China, the sustainable mining capacity in Shanxi, Shaanxi, Inner Mongolia, Ningxia, and Gansu is approximately 648 million tonnes, accounting for ~60% of the national sustainable capacity. It is estimated that by 2030, the sustainable mining capacity in this region could increase by 1.06–1.13 billion tonnes. The sustainable capacity of coal mining in east China is approximately 330 million tonnes, or ~31% of national sustainable capacity. By 2030, the sustainable mining capacity in this region could increase by 300–350 million tonnes. The sustainable mining capacity in northeast China is about 55 million tonnes, or 5.1% of the national sustainable capacity. The predicated sustainable mining capacity in this region could increase by 90–100 million tonnes by 2030. Sustainable mining capacity in south China is approximately 20 million tonnes, or 1.86% of the national sustainable capacity. This can be expected to increase by 30–50 million tonnes by 2030. Sustainable mining capacity in the Xinjiang-Qinghai area is about 25 million tonnes, or 2.32% of the national sustainable capacity and 25% of local coal output. Such capacity in this region could increase by 20–30 million tonnes by 2030. See Table 3 for the sustainable capacity and regional distribution of coal mining in China.

Sustainable Production Capacity Table 3

Table 3. The sustainable coal mining capacity in 2010 in China by coal production region

Development Path Toward Sustainable Coal Mining Capacity

In order to facilitate China’s progress toward achieving a sustainable coal mining capacity and to thoroughly improve mining-related issues and prevent over-exploitation, it is necessary to establish an improved policy and standards system and set the mandatory market threshold (i.e., production limit) based on the sustainable capacity. To increase the sustainable capacity of coal mining in China, we propose taking measures such as integration of the country’s coal resources as well as merger and reorganization of coal mining enterprises to accelerate the development of large- scale modern groups that will possess advanced technical capabilities, and especially make progress on construction and demonstration of the nationally planned 14 large-scale coal production bases with the mindset of achieving sustainable capacity development.

The development of a sustainable coal mining capacity in China can be implemented in “three steps”. First, from 2010 to 2020, there will be a mandate to “maintain the existing sustainable capacity coal mines, upgrade some coal mines to a sustainable capacity level, and focus on new coal mines that follow a sustainable capacity standard”. Specifically, this means that it is important to (1) maintain the mining capacity of the existing one- third of mining operations that have already reached the standard of sustainable capacity, (2) improve another one-third that have yet to meet the standard, but can be upgraded by means of technological development and innovation, and (3) gradually eliminate the remaining one-third of mining operations that will not be able to meet the standard. We propose that it is possible, and necessary, for China’s coal industry to make the adjustments listed above to be on the path toward achieving a sustainable coal mining capacity before the year 2020. As the second step, from 2020 to 2030, we propose achieving the goal of a sustainable coal mining capacity throughout China. And finally, from 2030 to 2050, we believe that China’s coal industry could establish a sustainable coal production industry and become a world leader in in the field of coal exploration.

The authors can be reached at xiehp@scu.edu.cn and liuhong@eri.org.cn.

 

Coal Exporters

Coal reserves are available in almost every country worldwide, with recoverable reserves in nearly 80 countries. Although the biggest reserves are in the U.S., Russia, China, and India, coal is actively mined in more than 70 countries. By contrast, Russia, Iran, and Qatar control 53.2% of the world’s gas reserves, and over 50% of the world’s oil reserves are located in the Middle East. Most coal is consumed domestically; only 15% is traded internationally. In a number of countries coal is also the only domestically available energy fuel, and its use is motivated by both economic and energy security considerations. This is the case in countries and regions such as Europe, China, and India, where coal reserves are much higher than oil or gas reserves. Most of the world’s coal exports originate from countries considered to be politically stable, a characteristic that reduces the risks of supply interruptions. A list of the top coal exporters is shown in the table below.

Coal Exporters

Source (text): WCA Coal Matters Factsheet (www.worldcoal.org) Source (table): IEA Coal Information 2011 (wds.iea.org)

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.