Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
China will shut down roughly 2,000 small coal mines this year, with a total capacity of 117.48 million tonnes, as part of the Beijing’s ongoing plan to reduce the alarming rates of air pollution and reduce the nation’s dependency on the fossil fuel.
According to the National Energy Administration (NEA), the first small-scale mines to go will be those old and depleting ones, in the east of the country. The government will also consolidate production from operations located in remote parts, including the vast northwestern regions of Inner Mongolia and Xinjiang, Reuters reports.
At the same time, China aims to increase the share of non-fossil fuels in its overall energy consumption to 10.7% in 2014, in an effort to further improve its energy efficiency, control energy consumption, optimize the energy mix and guarantee energy supply, said the NEA last month.
The idea of closing down mines is nothing new to China, which accounts for about 50% of the world’s coal consumption. In 2012 alone Beijing shut down 628 medium-sized coal mines, improved technological processes of 622 mines, merged 388 mines and phased out 97.8 million tons of outdated production facilities.
Last October, the Chinese government vowed to close at least 2,000 small coal mines by 2015 over safety concerns. The news came only a month after it said it wouldn’t allow more coal-fuelled installations near Beijing, Shanghai and Guangdong, in an effort to curb air pollution in the country’s most industrial regions.
Source: EIA.
China’s dependence on coal is well known. Annual consumption exceeded 1 billion short tons per year in 1988 and has exploded since then, to about 4 billion tons last year. This means the Asian giant gets about 70% of its energy from the fossil fuel, a number the government hopes to reduce to 65% by 2017.
