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Coal Price to Rise Steadily
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China's coal price is expected to go up steadily with the factors of environment, safety and resources included in the cost of coal production, according to a senior expert with the coal industry.


Wu Chenghou, executive director of the Coal Sale and Transportation Association of China, said at a recent forum on China's energy strategy that China's coal price is expected to go up steadily in the long term.


China's rising energy demand in recent years has resulted in excessive mining of coal, which has caused frequent occurrence of coal mine accidents and serious damages to the environment.


To achieve the sustainable development of coal resources, the Chinese government is taking a series of measures including the incorporation of environment, safety and resource factors into the cost of coal production.


Experiments are being made in north China's Shanxi Province, China's top coal producer, such as the levy of fees on resources access, environmental recovery and redevelopment of exhausted coal mines on coal producers.


According to the ongoing experiments in Shanxi, the cost of producing one ton of coal will rise by 50 to 70 yuan (US$6.25 to 8.75), said Wu.


But Wu said that coal price will not go up sharply in a short period. It will be a gradual process, he said.


As for this year's coal price, Wu predicted that as the growth rate of domestic demand will slow down, coal price is expected to remain at a stable level and the profits of coal enterprises will grow at a lower rate.


So far, nearly 90 percent coal contracts for power generation have been signed. The contract price of power coal rise over five percent per ton, ending months-long disputes between coal and electricity producers on the rise of coal price.


(Xinhua News Agency May 27, 2006)


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