Domestic coal industry reveals monopoly trend

The coal reforms that started in several provinces and regions in the country in the past few years are just the beginning of an industry reshuffle. Last Friday, the new version of the "Provisional Regulations on the Administration of Coal Mine Master Plan" (hereinafter referred to as the "Provisional Regulations on the Administration of Mining Areas") was formally implemented. The terms of the new regulations show that the government is further raising the threshold for the development of the coal industry and tightening the management rights. In the eyes of the industry, these actions also released a signal: the coal industry to a new direction monopoly.

Mine Management Specification Upgrade

On Friday, the Provisional Regulations on the Administration of Mining Areas issued by the National Development and Reform Commission formally came into effect. The “Notice of the National Development and Reform Commission on Regulating the Examination and Approval of the Overall Planning of Coal Mining Areas” (hereinafter referred to as the “Notice”) was also repealed.

The reporter noted such a set of figures in the interim regulations for the management of mining areas. The scale of production for coal mines that have been approved at the national level has increased from 2 million tons/year in the 2004 notification to 3 million tons/year. According to industry analysts, the increase in figures shows that the scale of production of coal enterprises in China is expanding. “The 2 million-ton/year mining area has now entered the small-scale ranks. The production capacity of the mining area is increasing day by day, and the criteria for judgment will also change.” According to its prediction, behind the evolution of this number, it also reflects the country's policy orientation. Large companies will become the mainstream of China's coal industry in the future.

Lin Boqiang, professor of Xiamen University's Energy Research Center, said that small coal companies are gradually exiting the stage of history and it is impossible to rise again. The provisional requirements for the management of mining areas specify the development requirements of the mining area in detail, and the access thresholds for coal mining enterprises have been lifted. Many small-scale enterprises will therefore be rejected. At the same time, the notification of escalation as a rule also shows that the country is on the right track for coal management and the intervention in the industry is being strengthened.

Mining development thresholds increase

In comparison with the 2004 notification, the reporter found that the implementation of the provisional regulations for the management of mining areas has placed greater emphasis on the planning approval process for the development of mining areas. The examination unit has been upgraded from a single enterprise group that was previously planned to a unit that has Class A coal engineering consulting qualifications. There are also special provisions for the detailed area of ​​the mining area, accounting for about 60% of the coal area in the mining area. From generalization to specificity, the threshold for the development of the coal industry is getting higher and higher. Coal analyst Li Junsong believes that improving access standards will optimize the entire coal industry's industrial environment and filter out illegal enterprises that are harmful to society and the environment. "A lot of illegal small coal enterprises not only have extremely serious security risks, but also cause great environmental damage due to their indiscriminate exploitation."

The responsibility of the assessment agency is more detailed in the interim regulations for the management of the mining area, and its role in the future development of coal is also being amplified. In the planning document design content, the original 8 development significance of mine development, mine field development scale and scope were upgraded to 15 items including mining environment protection, soil and water conservation, energy conservation and emission reduction, ground layout, construction land, and flood prevention and drainage. According to expert analysis, the increase in environmental protection clauses is in line with the current promotion of sustainable development, and is also an important measure for the country to guide the development of the coal industry.

Coal faces "monopoly"

Lin Boqiang believes that the future of the coal industry is upward. “The advancement of large-scale enterprises is being released year by year. In the future China market, there may be more coal giants going forward.”

Although with the tightening of policies, the coal industry has gradually shown signs of being "monopolized." However, Lin Boqiang analyzed that due to the relatively dispersed distribution of mining areas in China, the increase in the degree of concentration of coal companies will not be the case of two oligopolies in the oil industry. With the integration of small businesses into large companies, there may be more than a dozen giants in the coal industry competing for the Chinese coal market and increasing their competitiveness in the world.

When talking about the impact of the provisional regulations of the mining area on the coal industry, Li Junsong also believes that the industry monopoly may become a future trend, but the monopoly here is not very monopolistic. "This rule will clear some of the coal industry's historical catastrophes, enhance the sense of responsibility of all relevant units, and form a healthy development model. The development of mining areas will be more rational and efficient." Coal companies have reduced their numbers, or contributed to a monopoly, but the competition remains the same. exist. “Maybe there are only a dozen coal companies remaining. Under the intervention of national policies, its market operation will be strictly regulated within the framework of the national system. Overall, the regulations will accelerate the formation of a monopoly in the Chinese coal industry.”

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