(MENAFN- ProactiveInvestors - Australia) A Chinese government report unveiled in the U.S. on Tuesday has argued that China must import more coal as a means of conserving resources and lessening environmental risks.
Coal imported into China still has a price advantage of around $4.40 per tonne compared with domestically produced coal.
The Ministry of Land and Resources expects coal imports to increase this year. Imported coal accounted for less than 10 percent of China's total coal consumption in 2012, a relatively small share.
The report says China should take advantage of relatively low coal prices and import more to satisfy electricity demand in its most populous provinces, instead of relying on domestic coal. Local produced coal is expensive to transport, according to the Chinese government report.
China currently produces much of its coal from its northwest provinces and ships it by rail to populous provinces along the east coast, tying up rail and highway capacity.
The China Energy Outlook projects that China's consumption of coal will be as high as 3.8 billion tonnes per year, representing 63% of the country's total energy consumption.
Natural gas consumption predicted to soar
Natural gas consumption in China will reach 229 Bcm/year in 2015, an average annual growth rate of 18.5%, due to increased urbanization and increased use for power generation.
As a result, China's demand for LNG imports will soar, with the country currently lacking infrastructure to develop much of its own reserves. Â
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