Xinjiang: China's New Coal Eldorado on the Rise

In the western Chinese region of Xinjiang, a remarkable transformation in coal production is currently unfolding, establishing it as a fourth center for coal mining in China. While the country is increasingly striving to move away from environmentally harmful fossil fuel usage, the vast supply of low-cost coal from Xinjiang is making headlines. The production volume has risen by an impressive 22 percent this year, representing rapid growth compared to other regions of the country. According to forecasts, production could exceed the half-billion-ton mark by the end of December, according to data from the statistics office. With production costs of about 100 Yuan per ton, the price is well below the national average of around 370 Yuan, according to an assessment by Citigroup. Although China's President Xi Jinping has promised to reduce nationwide coal consumption starting in 2026, the recently announced projects considering Xinjiang's affordable coal resources could undermine these plans. Over the past ten years, the increasing relocation of energy-intensive industries such as aluminum smelting and the production of polysilicon, an element for solar modules, to the west, has greatly benefited from affordable coal and renewable energy in the region. Approximately 80 percent of the coal mined in Xinjiang is used locally. The rest is exported to neighboring provinces such as Qinghai, Gansu, and Ningxia, according to Citigroup analyst Jack Shang. New developments include plans by China Three Gorges Renewables Group for six 660-megawatt coal generators to support renewable energy projects. Similarly, China Energy Investment Corp. announced a 170 billion Yuan integrated facility construction to convert coal into oil products.