China coal mine closures after deadly incidents likely to add to commodity pressure
- A series of deadly incidents have prompted local authorities to temporarily close coal mines the Communist Party’s 100th anniversary on July 1
- But the wave of coal mining suspensions is likely to add to already high commodity prices in China that are squeezing some manufacturers
China’s biggest coal-producing province Shanxi, which accounted for about 14 per cent of total global coal output last year, announced on Thursday the immediate closure of two local mines for at least a month following two fatal accidents, according to the provincial emergency management department.
The northern Chinese province has now closed 130 coal mines with a combined output of about 185.6 million tonnes, or nearly one-quarter of total provincial capacity, data from BOC International Futures shows.
Other regions across the country have adopted similar measures, including Hubei, which has halted mining from June 15 to July 5, and the central province of Henan, which temporarily shut multiple mines with a total capacity of 19.25 million tonnes from mid-June.
“Safety is likely to be the priority over supply, and supervision will be only stronger, ahead of the Party’s 100th anniversary,” Zhang Xucheng, an analyst of Kaiyuan Securities, wrote in a note last Saturday.