EnviroLink Forum

Water availability is becoming a major issue for the power sector and other industries. A recent report by HSBC estimated that that the coal industry, from mining to power generation and coal-to-chemicals conversion, accounted for roughly one-sixth of China’s water withdrawals. “This level of water use is not sustainable; water tables are declining and in some areas coal mining is already being constrained,” the report said.

This – and the chronic pollution levels experienced by some Chinese cities in the past year – has at least partly motivated Chinese authorities to accelerate their move to cleaner energy sources, and to contemplate a cap on coal consumption of around 4 billion tonnes (still a lot).

This, however, has had a dampening effect on the price of coal, which in Chinese ports remains around 10 per cent below year ago levels. Bloomberg recently reported that thermal coal prices are at four-year lows, because industrial demand is lower than expected. Many coal mines have had to close because they are no longer profitable.