As the largest production base for smokeless coal and coalbed methane in China, Jincheng's coal industry exhibits significant characteristics in terms of resource endowment, technological upgrading, policy support, and industrial chain extension, while facing market fluctuations and transformation pressures. The following analysis is conducted from four dimensions: resources and market position, policy and technological upgrading, industrial chain synergy, and challenges and opportunities:
1, Resource endowment and market position: dual wheel drive of anthracite and coalbed methane
Quality and production capacity advantages of anthracite coal
The 3 # anthracite coal mainly mined in Jincheng has the unique advantages of "high calorific value, high mechanical strength, high thermal stability, low sulfur, low ash, and low volatile matter", with a calorific value of about 7000 kcal. It is a high-quality raw material for civilian coal and blast furnace injection coal. In 2023, the city's coal production will reach 147 million tons, setting a new historical high. Anthracite accounts for over 90% of the total, providing stable supply to surrounding provinces such as Hebei and Henan, and covering 118 markets in East and South China through railway transportation. In 2025, Jincheng City plans to increase its production capacity by 2.4 million tons per year through capacity verification, further consolidating its supply capacity.
Coalbed methane development leads the country
Jincheng is the largest coalbed methane production base in China, with a full caliber coalbed methane production of 7.41 billion cubic meters in 2023, accounting for nearly 30% of the country's total production. Through the "coal mining and gas extraction integration" model, enterprises such as Jinmei Group Qinshui Blue Flame Coalbed Methane Company have achieved large-scale development of coalbed methane, and their products are widely used in power generation, civil gas, automotive fuel and other fields. For example, the annual power generation capacity of the Sihe Mine Gas Power Generation Project exceeds 700 million kilowatt hours, and the daily gas supply capacity of the Sihe Compression Station reaches 270000 cubic meters, covering 2223 households in Jincheng City and surrounding areas. In 2025, Jincheng City will continue to promote the development of the entire coalbed methane industry chain, with the goal of building "one hub, three bases, and one center", and strengthening the emergency peak shaving guarantee capability for the Beijing Tianjin Hebei region.
2, Policy Support and Technological Upgrade: Parallel Implementation of Intelligence and Greening
Empowering the entire policy chain
Capacity optimization: Shanxi Province's "14th Five Year Plan" for energy specifies that by 2025, the proportion of advanced coal production capacity will reach 95%. Jincheng City will promote coal mine capacity upgrading through the "four batches" (adding one batch, constructing one batch, reserving one batch, and phasing out one batch), and the proportion of advanced production capacity will reach 90.95% by 2023.
Intelligent transformation: A total of 23 intelligent coal mines have been built in Jincheng City, and 85% of the coal mines have completed the intelligent transformation of their mining faces. The intelligent production capacity has reached 81.3 million tons per year. For example, Lanhua Kechuang Yuxi Coal Mine has built the "15337" intelligent mining system, which enables real-time transmission and remote control of underground data, and has been included in the list of 5G factories by the Ministry of Industry and Information Technology. Jinneng Holdings plans to build 17 intelligent mines by 2027, further improving production efficiency.
Green mining: Promote technologies such as backfill mining and coal and gas co mining. Tang'an, Mishan and other coal mines have launched pilot projects for backfill mining, and 8 coal mines including Chengzhuang and Yuxi have promoted coal and gas co mining. The proportion of green mining coal mines in the city exceeds 30%, and 10 national level green mines have been built under the 211 Project.
Low carbon transformation and environmental constraints
Carbon peak target: Shanxi Province requires a comprehensive energy consumption reduction of more than 10% per ton of raw coal production in mines by 2025, and a gas extraction utilization rate of 50% in coal mines. Jincheng City has increased the target of non fossil energy consumption to 8% 415% by promoting the "three reforms linkage" of coal-fired power (energy conservation, heating, flexibility transformation) and developing new energy (such as wind power and photovoltaics).
Intensifying environmental policies: In 2025, Jincheng City will implement an action plan to improve air quality, requiring a negative growth in total coal consumption compared to 2020, with a focus on reducing non electricity coal consumption. New and expanded coal projects will need to implement coal reduction substitution. At the same time, we will strictly control coal consumption in industries such as steel and ceramics, and promote the implementation of "coal to gas" projects (such as Yangcheng Ceramic Industrial Park).
3, Extension and Collaboration of Industrial Chain: Upgrading from Fuel to Raw Materials
Modern Coal Chemical Industry Cluster
Relying on smokeless coal resources, Jincheng focuses on developing coal chemical products such as urea, methanol, and caprolactam. The annual production capacity of urea in Lanhua Group is 1.2 million tons. Tianze Coal Chemical and Lanhua Science and Technology Innovation Park are promoting gasification upgrading and transformation to improve the energy efficiency level of coal to synthetic ammonia and methanol. In 2024, the output value of Jincheng coal chemical industry accounts for 35% of the total industrial output value, but some enterprises (such as Lanhua Sci Tech's caprolactam business) have incurred losses due to the decline in market prices and need to further optimize their product structure.
High value-added utilization of coalbed methane
Gas substitution: Jincheng has achieved widespread substitution of coalbed methane for civilian and industrial fuels through the "Gasification Jincheng" project. By 2023, the civilian penetration rate of coalbed methane in the city will exceed 90%, and the proportion of gas consumption in industrial sectors (such as JinGang hydrogen metallurgy and Qinshui carbon based composite material projects) will increase to 30% 1124.
Power generation and chemical raw materials: The installed capacity of coalbed methane power generation has reached 680000 kilowatts, with an annual power generation of 3.044 billion kilowatt hours, accounting for nearly half of the province's total; Planning and constructing a synthetic gasoline project using coalbed methane as raw material, exploring the extension of high-end chemical products.
Collaborative development of new energy and coal
Jincheng City actively lays out new energy sources such as wind power and photovoltaics. By 2023, the proportion of new energy installed capacity will reach 46%, an increase of 15 percentage points from 2020. For example, the first integrated photovoltaic storage microgrid in the province has been built in the eastern part of Lingchuan, and projects such as Guangdong Yuedian and Keyuan are being promoted, with an expected increase in grid connected capacity of 1.29 million kilowatts by 2025. At the same time, promoting the coupling of coal-fired power and new energy, such as Yangcheng Power Plant exploring the use of coalbed methane to replace heavy oil for combustion assistance, to achieve energy complementarity.
4, Challenges and Opportunities: Market Fluctuations and Transformation Breakthroughs
Core Challenge
Price downward pressure: In 2024, the average price of smokeless washing small pit mouth in Jincheng decreased by 23.11% year-on-year, and is expected to continue to decline to 950 yuan/ton in 2025, mainly due to the shrinking demand for urea, the elimination of fixed bed equipment, and the impact of imported coal. The net profit of Orchid Group in the first quarter of 2025 plummeted by 75.26% year-on-year, reflecting the direct impact of price fluctuations on corporate profits.
Rising environmental costs: Green mining technologies such as mine water treatment and gangue return to the mine have increased production costs, and some coal mines are facing production restrictions due to non-compliance with environmental standards. For example, in 2024, Jincheng City will eliminate 5 brick factories and 1 gas power plant in the urban area and surrounding areas, forcing enterprises to upgrade their equipment.
International competition intensifies: Against the backdrop of global energy transition, the demand for thermal coal has been under long-term pressure. Jincheng smokeless coal needs to explore new markets in chemical, metallurgical and other fields, but faces import competition from countries such as Indonesia and Australia.
strategic opportunities
Energy security guarantee: Under the national "dual carbon" goal, coal's position as a "ballast stone" cannot be replaced in the short term. Jincheng consolidates its domestic energy supply guarantee capacity through medium - and long-term contracts for electric coal (with a signing volume of no less than 90% of the allocated tasks by 2025) and the construction of a reserve system.
Technology spillover value: Technologies such as intelligent mining and coalbed methane extraction can be exported to other coal producing areas. For example, the "coal mining and gas extraction integration" model of Jincheng Coal Industry Group has been promoted nationwide, and the related technology has won the second prize of National Science and Technology Progress 2223.
Cultivation of emerging industries: Relying on the extension of the coal industry chain, Jincheng actively develops industries such as coal based new materials (such as carbon based composite materials) and new energy equipment manufacturing, promoting the upgrading of the entire "coal electricity chemical materials" chain.
5, Conclusion and Suggestions
The coal industry in Jincheng City has significant advantages in energy supply guarantee, green transformation, and industrial chain extension due to its resource endowment and technological accumulation, but it needs to cope with price fluctuations, environmental constraints, and market competition pressure. Suggestions for future development:
Strengthen technological innovation: increase research and development of intelligent mining, carbon capture (CCUS) and other technologies, reduce production costs, and improve resource utilization efficiency.
Optimize product structure: Promote the transformation of smokeless coal towards high-end chemical raw materials (such as coal to olefins) and high value-added materials (such as carbon fiber), and reduce dependence on the traditional fuel market.
Deepen industrial synergy: accelerate the integrated development of coalbed methane with new energy and coal chemical industry, explore integrated projects of "wind solar hydrogen storage", and build a multi energy complementary system.
Expand market channels: expand the export of anthracite through the layout of countries along the "the Belt and Road"; At the same time, relying on the construction of the Beijing Tianjin Hebei energy emergency peak shaving base, we will enhance the regional market discourse power.
Precise policy support: Strive for support from the National Low Carbon Transformation Fund, provide tax incentives for intelligent transformation and green mining projects, and guide social capital to participate in the energy revolution.
The coal industry in Jincheng City is currently in a critical transition period between "traditional energy supply guarantee" and "emerging energy cultivation". It needs to take technological breakthroughs and model innovation as the starting point to ensure energy security while achieving green, low-carbon and high-quality development.
