Who loses out in China's coal consolidation?

Coal has been the key ingredient in China's rapid industrialisation. But Beijing faces geographic, economic and political challenges as it strives for greater consolidation of the sector.

As part of a plan to double the amount of railway capacity it owns, China's Shenhua Energy Company is in talks with the Ministry of Railways to invest 10 billion yuan ($1.6 billion) in rail expansion projects in the coming months. The projects would help increase the amount of rail capacity Shenhua owns – currently almost 1600km – to 3170km. The expanded rail lines will better link major mining operations such as Datong in Shanxi, Ganqimaodu and Zhungeer in Inner Mongolia, and possibly the enormous Tavan Tolgoi mine in Mongolia to Shenhua's major eastern ports in Huanghua and Tianjin. From there, the coal most likely will be shipped to southern Chinese coastal cities in Guangdong and surrounding provinces, where demand is high but local reserves are scant.



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