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China Warns Coal Miners Against Excessive Profits

National Development and Reform Commission advisory comes as thermal coal futures tumbled 13%, extending losses to fourth day

China renewable energy
An open-pit coal mine near Ejin Horo Banner in China's Inner Mongolia Autonomous Region. China is aiming to start cutting coal consumption in 2026, but in the meantime could put as much as 150 gigawatts of new coal capacity into operation by then, according to research from the State Grid. Photo: Reuters.


China’s main economic planning agency on Friday warned the country’s coal miners against seeking excessive profits during the current energy crisis, saying they could face penalties.

The announcement by the National Development and Reform Commission (NDRC) came as thermal coal futures tumbled 13% on Friday, extending losses that began on Tuesday.

The NDRC has repeatedly warned it would intervene in energy markets,  as Beijing sought to damp down surging prices and ease a widespread power crunch. On Friday it said it would “strictly punish” companies reaping “exorbitant profits”.

The most active futures on the Zhengzhou Commodity Exchange, for delivery in January, fell to 1,380.80 yuan per tonne – a figure more than 30% lower since Tuesday’s all-time peak of 1,982 yuan per tonne.

Coking coal fell 11% and coke futures dipped 9.5% on the Dalian Commodity Exchange.

The NDRC said on Tuesday it was studying ways of intervening to lower coal prices and bring the costs of power down, calling on local officials to “strengthen the supervision of the coal power market”.


Power Generation ‘Guidance’

The agency said it would “investigate and punish violations of laws and regulations in a timely manner to maintain a good market order, guide power generation companies, especially coal-electricity joint ventures, to participate in power market quotations reasonably”.

The State-owned Assets Supervision and Administration Commission, which oversees China’s state enterprises, said on Monday that energy shortages and soaring prices have hit the economic recovery from the coronavirus pandemic.

Real gross domestic product grew just 4.9% last quarter, a significant slowdown from the previous quarter’s 7.9%, while seasonally adjusted growth came in at just 0.2%.

Sara Johnson, executive director of global economics at IHS Markit, said the energy crunch and property sector debt, were the biggest threats to China’s economic stability. 

Coal-based thermal power accounts for 70% of the country’s electricity generation. “But it has been constrained by Beijing’s decarbonisation policies and cessation of coal imports from Australia in 2021.”


• By George Russell



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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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