An Obscure Chinese Mining Law Is Hobbling Global Energy Security - Yahoo Finance
(Bloomberg) -- China’s current energy crisis can be traced back in part to a legal amendment targeting miners that garnered little notice when it went into effect in March.
Most Read from Bloomberg
Article 134 in China’s criminal law elevated penalties for a series of violations from fines to possible jail time in response to an increase in mining-related accidents. However, that law led to a newfound hesitancy among miners to boost production and intensified a supply deficit that could not come at a worse time for President Xi Jinping as the country faces a severe power crunch amid a surge in energy demand. The crisis also threatens to slow economic growth and snarl global supply chains.
The heightened punishments are a key reason that miners were hesitant to increase their output despite government calls to ameliorate the power crisis, according to five traders and analysts who spoke to Bloomberg this week on the condition of anonymity. The industry’s ability to flexibly respond to demand surges has been further stymied by increased safety inspections and an anti-corruption campaign in a major coal-producing region.
China’s current power crunch is affecting about 20 provinces and regions, representing over 66% of its GDP. Coal has long been central to China’s power generation, and broader economy -- the country produced around 3.8 billion tons of coal every year in past decade, the same level as the rest of the world combined.
Prior to the enactment of the legal amendment, the miners were able to respond more nimbly. For example, when the industrial recovery from the pandemic caught miners by surprise last winter and led to coal shortages and power cuts during a December freeze, miners drove production to an all-time record that month amid orders to boost output. The surge in prices cooled by the end of February.
source: https://finance.yahoo.com/news/obscure-chinese-mining-law-hobbling-210000026.html
Your content is great. However, if any of the content contained herein violates any rights of yours, including those of copyright, please contact us immediately by e-mail at media[@]kissrpr.com.