As another of China’s main mining regions gets affected by floods, the price of coal used in power plants has risen to a new high.
After unprecedented floods ravaged the mining area of Henan in July, heavy rains have pounded Shanxi, the country’s largest coal producing province, in recent days.
The price of thermal coal on the Zhengzhou Commodity Exchange increased by more than 10% on Tuesday.
The floods have complicated China’s efforts to boost gasoline supplies in order to alleviate the country’s increasing energy crisis.
Flooding caused the closure of dozens of mines in Shanxi Province, which supplied about a third of China’s coal supplies this year. Nonetheless, several sites are gradually restoring operations.
According to local officials, at least 15 people have perished as a result of the catastrophic flooding that has affected more than 1.76 million people in the province.
Last week’s torrential rains caused buildings to collapse and landslides in more than 70 districts and cities across the northern region.
China was already suffering from an energy deficit before to the disaster, which resulted in power outages in several regions of the nation.
Energy companies have been compelled to curtail electricity supplies to millions of households and businesses in recent weeks.
Beijing is said to have instructed China’s coal miners to increase output on Friday.
The action was the latest attempt by authorities to boost coal supply after prices reached new highs and energy companies were compelled to restrict power due to power shortages.
A succession of power outages have prompted industries to reduce production or shut down altogether since last month.
The northeastern Chinese manufacturing hubs have been particularly badly impacted.
The latest increase in thermal coal prices follows a 12 percent increase on Monday.
As the global economy begins to recover from the pandemic, energy prices have been rising around the world.
Brent crude hit its highest level since October 2018, while US-traded oil hit a new seven-year high on Monday.