China's coal is slowing with top mining regions limiting growth and directing investment towards clean energy to replace the dirtiest fossil fuel, Bloomberg reported on Wednesday. China has excess coal due to seven years of continuous production growth, which included a 10 per cent spike in 2022 after widespread power outages severely harmed the industry. This has kept costs down. Record production, which hit 4.7 billion tonnes in 2023, has come at a price, though, with higher worker fatalities and underwhelming financial results for mining firms. Simultaneously, China faces the deadline of 2025 to achieve its climate goals by peaking coal consumption. Guosheng Securities Co. stated in a note that this year's output growth might only reach 1.4 per cent, the lowest level since 2017. According to annual plans released by local governments, the four largest coal hubs, which account for over 80 per cent of output, have abandoned the aggressive targets that characterised previous years. Their focus is primarily on aiding China's rapidly expanding renewable energy sector. Energy security is expected to be a major topic of discussion at Beijing's annual legislative meeting early next month, and the reports will set the tone for those talks. The top coal-mining province, Shanxi, reduced its annual growth target from over 100 million tonnes to 57 million tonnes this year. Interestingly, its report states that it intends to install solar panels on large tracts of land that are currently too contaminated by mining to be used for housing or agriculture. Moreover, the second-largest producer, Inner Mongolia, stated it would finance the expansion of clean energy projects worth 300 billion yuan ($42 billion), but it did not set a target for coal output. Its ability to produce renewable energy will be used above thermal power for the first time. Aiming to triple clean power by 2030, China's grand strategy also includes the accelerated construction of four megabases in the desert, according to the authorities. Shanxi Province, the world's third-largest coal miner, stated that while reducing coal burning to reduce air pollution, it only intended to increase coal production slightly. Additionally, it will help Longi Green Energy Technology Co., China's largest manufacturer of solar panels, expand by 100 gigawatts. Furthermore, a major driver of China's growth in coal output, the Xinjiang region announced that it would reduce its growth to 9 per cent from 11 per cent last year, but it will continue to push for hydrogen and renewable energy sources. Notably, the fall in iron ore this week, which has seen it drop 9 per cent so far, doesn't seem to be stopping as the lack of demand for Chinese steel keeps prices high. During a bilateral strategic dialogue on Tuesday in Paris, China and France decided to further expand their cooperation in fields like agriculture, nuclear energy research and development, artificial intelligence, and aerospace.
