Chinese authorities have awarded a licence to Lianhai Coal Industry Co. to operate the Baijiahaizi coal mine in Ordos, Inner Mongolia, reported Bloomberg.

The mine can produce for around 97 years and spans nearly 170m², the news agency cited China Coal Resource as saying.

It reportedly has 2.03 billion tonnes of coal reserves and is expected to have a production capacity of 15 million tonnes per year (Mtpa).

Lianhai secured the licence from the city’s natural resources bureau on 2 April, Bloomberg further stated.

Said to be the largest coal mining hub in China, Ordos produced 197Mt in the initial two months of this year. Its aim is to generate a total of 1.18 billion tonnes for the year.

Chinese officials have directed leaders in mining regions to boost production capacity by 300 million tonnes this year, the news agency said.

The move is aimed at protecting the country from the impact of surging energy prices. 

Bloomberg also said that the National Development and Reform Commission approved the project in 2019.

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By GlobalData

The latest licence will enable its legal operations although operations commenced even prior to the receipt of local approvals. 

In the final quarter of 2021, Chinese coal futures reached all-time highs following flooding in the Shanxi Province, which accounts for 30% of the annual energy supply in China. 

Of the region’s 682 coal mines, 60 were shuttered as a result of the floods that were caused due to heavy rainfall.