China's government announced Monday that it will close more than 1,000 coal mines this year in an effort to curb the country's excess of fossil fuels as the country switches to cleaner alternatives. The country's National Energy Administration announced that the mine closures are part of a plan detailed earlier this month to keep as much as 500 million metric tons of coal in the ground and off the market within the next three to five years.
China reigns as the world's top coal consumer, but while demand for fossil fuels wanes as economic growth slows and the country shifts to cleaner alternatives, production remains so high that the surplus has driven down coal prices by up to a third.
In light of this, China has vowed to stop approving all new coal mines projects over the next three years staring in March as part of bid to curb production. For example, China's production was so high last year that it mined 3.7 million tons of coal while still maintaining a surplus supply of 2 million metric tons annually, according to Reuters.
Despite the overproduction and resulting mitigated prices, there appears to at least be some recovery this year with thermal coal at the port of Qinhuangdao up 2.7 percent rising to $58.29 per ton.
As China puts a greater effort of switching to electricity, coal consumption with inevitably fall. Officials told Xinhua News Agency in December last year that it expects to see China using 3.96 billion metric tons of coal next year, representing a drop from a 64.4 percent to a 62.6 percent share of the country's energy needs, according to The Hill.
In another bid to control its coal production, officials announced that China could eventually shutter 5,600 of its 10,760 coal mines by introducing a policy that bans those with an annual output capacity of less than 90,000 tons.
