September 06, 2008

China shifts railway capacity to coal transport

Xinhua reported that China's Ministry of Railways issued an urgent announcement ordering all local railway bureaus to step up concentrated efforts in coal transport to ensure the operation of the nation's key electric power plants.

It warned the shutting of some coal mines during the Spring Festival, which falls next month, tended to exacerbate supply tensions in the dry season when hydropower output declines. Thermal power plants also consume large quantities of coal, reducing the stock sharply.

To ensure fuel supply during the upcoming Lunar New Year and the National People's Congress session, the ministry said policies would favor coal transport. Coal heading for power plants in the country's economic hubs the eastern and central regions would be transported first. In addition, the Ministry of Communications asked shipping companies to halt exports and transfer coal more swiftly to the big cities.

China is heavily dependent on coal as it is considered an affordable energy resource at a time when oil and natural gas prices rise steadily in the international market.