Coal production will increase as prices surge. (Photo : Getty Images)
The National Development and Reform Commission (NDRC) will allow companies to increase coal production as prices are increasing in the global market.
The plan includes the allowing of working time by coal plants but the NDRC will be careful in carrying out and will be watchful over the coal mining companies.
Coal production has been excessive in the country and the government has been trying to curb overproduction.
Guan Dali, a coal analyst from the industry portal chem365.net, said, "If the government loosens production restrictions too much, it might suppress the coal price, and the government does not want that to happen."
Yicai.com reported that the NDRC held a meeting on Thursday with representatives from major domestic coal companies and workers from the China National Coal Association (CNCA). The NDRC wants to stabilize coal supplies and wants to prevent coal prices from surging.
Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University said that the price of coal is increasing because "the government shortened of domestic coal mines' annual working days, which largely suppressed coal supplies."
According to Guan, "The government does want coal prices to rise, just not in a too abrupt manner."
He added, "With the rising coal price, some private coal mines have already secretly restarted production."
Zhao Chenxin, the spokesman of the NDRC, said that total production already was short by 95 million tons of coal by the end of July, which 38 percent of the yearly target.
Some experts are skeptical if the government really intends to cut production of coal.
According to Deng Shun, an analyst with ICIS China, "China's coal imports will continue to rise as the country's production cuts have created a supply shortfall. There is no sign that the government will ease its efforts in addressing overcapacity."
