Coal sector focus of upgrade

China will rationalize the coal industry and develop cleaner, more advanced technology for the sector by spending more than 500 billion yuan ($79 billion) a year during its 12th Five-Year Plan (2011-15), a senior government official said on Wednesday.

The scale of investment in the coal industry is almost the same as that for the power and oil sectors, which is high, said Fang Junshi, head of the coal department of the National Energy Administration.

He said that during the plan period, the industry will experience more mergers and acquisitions and become increasingly internationalized.

The industry's development will concentrate on cleaner technology that will reduce carbon emissions, he added.

During the plan period, China will build 60 coal mines with an annual production capacity of 5 million metric tons each and 10 mines with more than 10 million tons of annual production capacity each.

Fang said the country will develop some reserve projects in the western regions of China in the following years and many of those projects have yearly production capacities of more than 10 million tons.

China's coal output in 2010 was 3.24 billion tons, accounting for 43.4 percent of the global output.

Consumption has risen by about 200 million tons annually in the past few years and the country's total coal consumption accounts for about 44 percent of global consumption.

To reduce carbon emissions, China aims to hold coal output below 3.9 billion tons by the end of 2015.

At the same time, the government will encourage companies to explore resources abroad to ensure the country has a sound energy supply, according to Wu Yin, deputy director of the NEA.

He estimated that China will consume 5.5 billion tons of standard coal by 2020 and 7.5 billion tons by 2030.

The latter figure will equal the total projected coal use of the 34 member countries of the Organization for Economic Cooperation and Development.

As the climate issue has received increasing attention in recent years, China, as the biggest energy consumer, has moved to increase its energy efficiency through the use of advanced technology, especially regarding coal, which supplies 70 percent of the country's energy.

The State Administration of Coal Mine Safety, the China National Coal Association and NEA will jointly hold the 2012 China International Forum on Coal Industry from Oct 10 to 12.

The forum will discuss the new development mode of the global and Chinese coal industries amid environmental pressure and climate challenges.

Foreign companies and domestic producers will discuss mining technologies and the manufacture of coal mining machines.

According to Fang, although Western countries still have more advanced technology in mining machinery, China has developed rapidly in the sector in the past years. Equipment that can produce 10 million tons of coal annually is already in use.