China’s National Development and Reform Commission (NDRC) has finalised regulations to establish a coal production reserve system by 2027, reported Reuters.

The initiative aims to stabilise thermal coal prices and ensure consistent supplies to power plants.

The system will be based on a 2021 goal to maintain coal reserves at 15% of annual output, with an additional focus on “dispatchable” coal production capacity.

Initially proposed in December 2023, the NDRC’s rule outlines a target of 300 million tonnes (t) of dispatchable coal production annually by 2030. This figure represents approximately 6% of China’s coal output from the previous year, reported the news agency.

The coal reserve system is designed to ensure that production capacity is readily available to be mined when necessary, particularly for use in electricity and heat generation.

Under the new system, coal mines designated as part of the capacity reserve must be prepared to increase output when prices exceed a defined reasonable range or when supplies are strained.

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These mines will be exempt from local government mandates to enter into medium- and long-term contracts with purchasers.

The NDRC has indicated that large-scale, modern mines with robust safety standards in leading coal-producing regions such as Shanxi, Inner Mongolia, Shaanxi and Xinjiang will be given priority for inclusion in the coal reserve plan.

Earlier this year, reports emerged that China and Indonesia were set to cut production of nickel as producers look to limit losses from a drawn-out slump in market metal prices.

At that time, Reuters reported that the two nations are likely to reduce output by at least 100,000t this year.