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China state planner conducts ‘clean up’ of illegal coal storage sites -Breaking

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© Reuters. FILEPHOTO: On October 31st, 2010, a coal-burning powerplant can be seen in Baotou (in China’s Inner Mongolia Autonomous Region). REUTERS/David Gray

(Reuters) – China announced that it would “clean up” and “rectify” coal storage areas in certain coal-producing regions and will ban sites with no approvals as part of its latest attempt to curb skyrocketing coal price.

Late Tuesday’s statement by the National Development and Reform Commission (NDRC), stated that many coal storage areas around the mines of Shanxi and Shaanxi were unlicensed. This “made it convenient for illegal trader to hoard coal” and “seriously disrupted” the market.

The Zhengzhou Commodity Exchange has seen thermal coal prices soar to over 100 percent this year. However, prices are down about 40% since record-breaking highs in the summer after cooling measures. On Wednesday morning, it dropped 10% and reached its daily trading limit.

The NDRC stated that in addition to enhancing supervision and increasing investigations, these three areas need to create a reporting system for compliant and legal coal storage sites and prohibit those with no approvals.

The statement stated that they should crackdown on any illegal profit-making activities, such as hoarding coal and driving up prices through illegal coal storage.

China is the largest producer of and biggest consumer of coal in the world. This has led to electricity rationing across many areas.

Although the country is pushing coal miners to increase their output, and to import more to help power stations rebuild stocks before winter heating season begins, analysts believe that shortages will continue for at least a few more months.

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