China relaxes coal mining limits to increase production


China's top planning body has relaxed restrictions it imposed on working days at its coal mines to boost production and meet the growing fuel demand during colder months.

The National Development and Reform Commission (NDRC) had previously ruled that coal mines can operate up to 276 days a year to ensure production safety. Now, the curb has been lifted and the coal mines can operate 330 days in a year, reported Reuters.

This new step will increase coal production, which is the country’s primary energy resource.

The previous NDRC ruling increased coal prices. The prices would have increased further due to the growing demand during winter months.

"Supply concerns could remain as some mines may be unable to boost their production."

Huaan Futures coal analyst Wang Fei was quoted by the news agency as saying: “This is the biggest policy adjustment to lift coal production so far. We are expecting coal mines to quickly increase production as soon as early 2017.”

According to NDRC, the new ruling will remain effective until the end of the Chinese winter.

Restrictions on working days at mines had decreased coal production in the country by 11% compared with 2015. Production in October alone fell by 1.5% from the previous month.

Supply concerns may remain as some mines may be unable to boost their production. As a result, prices of coal could continue to remain high this winter despite the new ruling, analysts at Wood Mackenzie predicted.