China Approves $458 Million Coal Project amid Power Crisis

China’s National Energy Administration (NEA) said Thursday it approved a coal mine project worth 3.1 billion yuan ($458 million) in the country’s Inner Mongolia Autonomous Region, Reuters reported.

“The project has annual production capacity of 4 million tonnes a year, with phase one at 1.2 million tonnes and phase two at 2.8 million tonnes [sic],” Reuters quoted the NEA as saying on July 21.

The state-run NEA confirmed its approval of the mining project through a press release issued on May 24. The NEA said the new coal mining site would be built in the banner, or administrative division, of Zhungeer, which itself is administered by Inner Mongolia’s Ordos City. The administration said that one of its goals in approving a new mining site in Zhungeer was to help “ensure stable energy supply.”

China’s state electric grid is primarily fueled by coal power. Though the public grid has suffered from periodic failings for years, its inability to provide China with sufficient energy has worsened in recent months amid a national heat wave. China’s state power grid had already faltered throughout much of last year, causing rolling blackouts across several provinces starting in the summer of 2021 that continued into the spring of 2022.

Li Keqiang, who serves as the premier of China’s State Council, “urged tapping into advanced coal capacity, securing power supply and resolutely preventing power outages amid the peak summer season,” in remarks directed toward energy officials on June 21, China’s state-run Global Times reported.

Roughly one dozen provinces across China’s north, central, and eastern regions documented record-high power usage throughout June. The spike in electricity demand corresponded with an ongoing heat wave that has tested China’s state power grid. The network, officially the State Grid Corporation of China (SGCC), supplies electricity to more than 1.1 billion people in China and covers demand across 26 municipalities, provinces, and regions.

Ordos, the site of Inner Mongolia’s recently announced coal mine plant, comprises one of the 12 major subdivisions of the northern Chinese territory. The city is located about 350 miles west of Beijing, China’s national capital, and is considered a Chinese “mining hub,” according to Bloomberg.

“Inner Mongolia accounted for about a quarter of national coal output last year, and as such maintaining its production would be critical to preventing a repeat of the power crisis that struck China in the fall,” the news outlet observed on April 25.

Xinhua, China’s official state press agency, reported in March that Inner Mongolia’s coal output “exceeded 1 billion tonnes” last year. Inner Mongolia’s coal production for 2021 allowed the territory to transmit “246.7 billion kilowatt-hours of electricity out of the region in 2021, ranking first in China for 17 consecutive years.”