Coal Mines Struggles due to Continuous Slump in the Industry
China’s Shanxi Province coal mines are struggling as they are faced with a continuous slump in the fortunes in the coal industry which was once the backbone of it local economy. Shanxi’s coal industry has lost around 4 billion yuan during the first half of 2015 as the government released measures on the polluting sector with took its toll.
Coal production hits 463 million tons in the first six months, showing a year on year decrease of around 3.2 percent. But coal storage has increased to 47 million tons up 35 percent and account for half of the total inventory in China. But the industry already suffered losses in the past 12 months. The Shanxi government is controlling the growth of coal production in the recent years in efforts of shaking the economic mode of relying heavily on coal resources. As of the moment the provincial government hasn’t approve any new coal mines for the next five years to deal with the over capacity.
Banks in China also issued a variety of restrictive financing measure for coal related industries which included raising the finance threshold for all coal producers and lowered loan scales. Experts say that it will be difficult to reverse the situation in the market, but the economic slowdown will be able to cap the demand for coal as the country increased their efforts in saving energy and reducing emissions. Plus the demand for alternative energies ranging from natural gas and hydropower will also reduce the demand for coal.