China’s so-called Golden Triangle of coal production is suffering heavy losses amid shutdowns and a severe cash crunch, China Economic Weekly reported Tuesday.
Private coal producers in Yulin, Erdos and Shuozhou, China’s largest coal production centers in Shanxi province, have been grappling with falling prices since 2012.
Nearly 40 percent of local miners are losing money and a few profitable ones have a thin margin of 10-20 yuan per ton, Qiao Jiehua, an official from the coal authority in Erdos, was quoted as saying.
Coal sales in Erdos fell 17.3 million tons to 163 million in the first four months, with selling prices down 17.5 percent from the previous year.
Miners in Yulin and Shuozhou have been losing an average of 60 yuan per ton.
Meanwhile, 66 miners have halted production, the report said.
And with some commercial banks halting loans to the sector, coal miners have seen their cash flow worsen.
The Golden Triangle accounted for nearly one-third of China’s coal production in 2013 and is a key growth engine for the region.
Erdos saw its economy slow to 7.5 percent in the first quarter. Shuozhou and Yulin decelerated to 4.1 percent and 7.1 percent respectively, the report.
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