Coal Mining Equipment

China

Overview                                                                                                    

x	2004	2005	2006 (Estimated)
Total Market Size	3174.2	2943.4	3310.6
Total Local Production	2808.3	2657.2	3038.5
Total Exports	258.2	304.3	403.1
Total Imports	624.1	590.5	675.2
Imports from the U.S.	97.3	153.9	95.6

Coal is the most dominant energy source in China, making up about 70% of total primary energy consumption in the country.  China’s coal-producing area exceeds 550,000 square kilometers. It has potential coal reserves of around 5.57 trillion tons.  China is the world’s largest coal producer, accounting for nearly 28% of the world’s annual production.  In 2005, China’s coal production reached 2.19 billion tons, an 8% increase.  The percentages of central government-managed coal mines, provincial government-managed coalmines, and township coalmines are 48%, 14% and 38% respectively.  With the significant ease of power shortages in 2006, China’s under supply of coal no longer exists, and the pressure of over supply is increasing.  Coal production will surpass 2.4 billion tons in 2006.  According to the latest report compiled by the State Information Center, the growth of coal production and sales is set to drop in 2006, and the growth of coal production capacity will exceed that of demand.

Generally speaking, China’s domestic coal mining equipment occupies a dominant (90%) position in China market.  With the rapid development of coal mining technology in China, several Chinese companies have been able to manufacture high-tech mining equipment, such as super-power electric haulage shearers, hydraulic support systems, and armored face conveyers.  Nevertheless, China’s major coal mining equipment is generally 10 to 15 years behind that of other countries with respect to mining efficiency, equipment quality, environmental protection of mines, and safety.  U.S. coal mining equipment manufacturers and coal mine investors face long-term opportunities in China’s coal industry, particularly with China’s large coal firms.    

Best Prospects/Services                                                                                       

U.S. companies enjoy their greatest competitive advantage in supplying heavy coal mining machines and systems.  For underground mining operations, U.S. firms compete well in the following categories: longwall shearers, stageloaders, continuous miners, batch haulage vehicles, road headers, hydraulic roof support systems, and armored face conveyors.  For open-pit mining operations, U.S. firms compete well in the following categories: electric mining shovels, walking draglines, blast hole drills, and heavy mining trucks.   

Coal mine safety remains a critical issue at Chinese coal mines.  Accidents in 2005 killed over 6,000 coal workers.  In 2006, China saw 4,236 deaths in the first 11 months, the lowest number in the past three years.  The Chinese government is trying to close 4,861 small coal mines (below 30,000 tons of production capacity) without sufficient protection on coal mine safe production 2006-2007. Only 35% of China’s more than 25,000 coal mines have safety equipment.  According to the State Administration of Coal Mine Safety Supervision, China will invest USD 6 billion over the next few years for safety equipment in its large, state-owned coalmines.  Of this investment, the central government will contribute $605 million and coal companies will cover the rest.  This investment will create significant opportunities for foreign companies to export safety equipment to China.  Best prospects include: coal mining safety equipment, security equipment, gas control systems, and fire monitoring and control equipment.        

 

Opportunities                                                                                

Due to the nationwide shortage of electricity, China will continue heavy investment in coal production for many years to come.  Experts predict China will need to invest over $151 billion in coal infrastructure by 2020.  The investment will cover the following areas:

·            Construction of new coal mines and coal bases

·            Improvement of coal mine safety

·           Clean coal processing technology

·           Coal conversion technology (including coal liquefaction and coal gasification)

·           Coal bed methane development and utilization

 

In order to improve coalmine management and increase coal production, the Chinese government has established new policies to encourage foreign investment in the coal-mining sector.  This shift in policy has included granting rights for the mineral geological exploitation of domestic coalmines to foreign companies.

 

Resources                                                                                                     

Chinese weblinks for coal mining

National Development and Reform Commission

http://www.sdpc.gov.cn/

State Administration of Coal Mine Safety

http://www.chinasafety.gov.cn/

 

China National Coal Association

http://www.chinacoal.org.cn

 

U.S. Pavilion at China Coal & Mining Expo 2007

http://www.chinaminingcoal.com

 

U.S. Commercial Services Contact Information in China

Beijing Office:

Tel: (86-10)8529-6655

Fax: (86-10)8529-6558/9

David Murphy

Mei Baochun

 

Shanghai Office:

Tel: (86-21)6279-7930

Fax: (86-21)6279-7639

Eric Hsu

Stellar Chu

 

Guangzhou Office:

Tel: (86-20)8667-4011

Fax: (86-20)8666-6409

Lena Yang

 

Chengdu Office:

Tel: (86-28)8558-3992

Fax: (86-28)8558-3991

Cui Shiyang

Chen Ling