In China, coal prices touches new high as mines shut due to devastating flood

As China's coal-rich province Shanxi is devastated by flood, the price of coal used in power plants has soared to a new all-time high, as per the reports of BBC. Flooding prompted the closure of dozens of mines in Shanxi Province, which provides almost a third of China's coal supplies in 2021. While some sites are progressively restoring operations, others are still shut down.

Local officials stated on Tuesday that at least 15 people had died as a result of the extreme flooding that has impacted over 1.76 million people in the province. Houses collapsed and landslides erupted throughout more than 70 districts and cities in the northern province last week as a result of torrential rain. China was already suffering from an energy crisis before the disaster, which resulted in power outages in several areas.

Energy companies compelled to cut electricity supplies

Energy companies have been compelled to cut electricity supplies to millions of households and businesses in recent weeks. Beijing is said to have instructed China's coal mines to increase output on Friday, according to BBC. The action was the latest attempt by authorities to boost coal supplies after prices reached new highs and energy companies were compelled to limit power due to power shortages.

A succession of power outages has caused firms to reduce production or shut down completely since last month. The northeastern Chinese manufacturing hubs have been particularly heavily struck. The latest increase in thermal coal prices follows a 12 per cent increase on Monday, according to BBC. As the global economy begins to recover from the pandemic, energy prices have been rising around the world.

China and coal

With over a thousand coal-fired power stations, China is the world's largest producer and consumer of coal, as well as the world's largest user of coal-generated electricity. According to the Centre for Research on Energy and Clean Air in August 2021, 43 coal power plants were announced in the first half of 2021. Coal mine fires in China are projected to burn roughly 200 million kg of coal per year. Small unlawful fires are common in Shanxi.

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