China reversing some coal output restrictions to ease tight supply

Beijing

CHINA is continuing to loosen mining policies that caused global coal prices to surge this year, temporarily reversing some output restrictions and encouraging production to ease tight supply through winter.

The latest guidance given by regulators last week signals the government is allowing a wider range of producers to increase output, according to analysts at Citigroup Inc, China International Capital Corp (CICC) and China Coal Transport and Distribution Association (CCTD). The new policy means miners that account for more than 92 per cent of the country's effective capacity will be able to raise production until the end of March, according to Citigroup. "This is a big policy change," David Fang, a director with the CCTD, said by phone from Beijing. "The government's previous release of advanced capacity didn't seem to be enough to curb the price rally."