World Energy Outlook 2007

of 829 Mt of coal each year by the end of 2011 (Barlow Jonker, 2007). The
Shenhua Group, a vertically integrated company, is seen as a role model,
employing modern corporate management systems and achieving high levels of
productivity. Vertical integration in other companies would promote the policy
of “west-east power transmission” from mine-mouth power plants located in
the Mengxi area.
Coal Transport
Our Reference Scenario projections imply a continuing need to expand China’s
inland coal transport infrastructure. Shipments from inland to coastal
provinces will need to increase from 507 Mtce in 2005 to 1 060 Mtce in 2030
for steam coal and from 117 to 182 Mtce for coking coal. At present, coal is
transported to consumers in China by rail, road, inland waterways and coastal
vessels. Shanxi is a key coal supplier to other provinces, exporting around
300 million tonnes, mainly by rail, with the Datong to Qinhuangdao Port
(Daqin) line being of particular significance, carrying coal for both domestic
and export customers. Despite the remarkable growth in coal production since
2000, China suffered electricity blackouts during 2003-2004 partly due to coal
transport bottlenecks.
10
More than one-half of China’s total coal supply is moved by rail. This one
billion tonnes of coal accounts for around 44% of national rail freight (Barlow
Jonker, 2005). Much coal is transported on older trains, with an average
payload of 3 000 tonnes, over routes shared with passenger and other freight
trains. There are only two modern rail links dedicated to coal: the 600-km
Daqin line and the 588-km line from Shuozhou to Huanghua. Both are highly
efficient and carry trains of up to 25 000 tonnes. New investment is being
made to expand rail capacity, including the newly expanded Houma-Yueshan
link in Shanxi and a potential third dedicated link of 740 km from Baotou in
Inner Mongolia to the port at Tangshan. Foreign investment is being
encouraged, although passenger routes are likely to be more attractive to
investors. The government’s Middle- and Long-term Railway Network
Construction Plan envisages a range of major investments in new long-distance
lines to create separate lines for passenger and freight traffic. If it is
implemented, the length of the railway network would reach 100 000 km by
2020. However, rail constraints are likely to persist as coal is increasingly
transported over longer distances from the western provinces.
National rail freight costs for coal are high by international standards,
particularly on the important west-east routes, where rates are
0.12 yuan/tonne-km ($0.016/tonne-km). In addition to these national rates,
coal must often be shipped on local rail links from mines to the national
Chapter 10 - Reference Scenario Supply Projections 339