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China provincial governor urges more coal imports to resolve power shortages

SHANGHAI, Sept 28 (Reuters) – China should work to import more coal from Russia, Indonesia and Mongolia in order to resolve supply shortages now crippling large sections of industry, said Han Jun, governor of the northeastern province of Jilin, one of the worst-hit regions.

Speaking to local power firms on Monday, Han said “multiple channels” needed to be set up to guarantee coal supplies, according to the province’s official WeChat social media account. He said the province would also dispatch special teams to secure supply contracts in the neighbouring region of Inner Mongolia.

Jilin is one of more than 10 provinces that have been forced to ration power in order to cope with supply constraints. Power generators are also facing soaring coal prices, but are unable to pass them on to consumers.

Han urged companies to fulfil their “social responsibilities” and “overcome the difficulties” caused by coal price rises.

David Fishman, China energy policy researcher and manager at the Lantau Group, an economic consultancy, said flaws in China’s pricing system were ultimately to blame for the current round of shortages.

“This is about coal generators unable to operate their plants profitably, in most cases,” he said.

“In the short term, the only relief policies that make sense are digging more coal out of the ground, which is bound to be an unpopular idea, or make end-users pay more for their power,” he added. (Reporting by David Stanway; Editing by Kenneth Maxwell)

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