Can Yulin Break the Strange Circle of 'Only Mining Can't Turn around'

Known as China's "Kuwait" in Yulin, Shaanxi Province, a "escalation war" of coal resources is starting. Reporter exclusively learned that the Shaanxi Development and Reform Commission, the Provincial Finance Department and the Provincial Natural Resources Department recently jointly issued the "Opinions on Supporting Yulin City to Accelerate the Conversion of Coal Resources" (hereinafter referred to as "Opinions"), which clearly indicated that they would increase their support for coal conversion in Yulin, and push for the clean-up and rectification of coal mining rights, market guidance and economic incentives. Especially for some planning projects, there are persistent problems such as lagging construction progress, low conversion rate of resources and short transformation industry chain. Next, we will take targeted and operational measures to supervise the transformation of projects that have not reached the expected level. For those projects that are difficult to implement the transformation, the Yulin Municipal Government will put forward suggestions for the recovery of resources.

The Opinion immediately aroused concern. Many measures and vigorous efforts to speed up the break of the cycle of "occupying but not taking" and "only taking but not turning" are sufficient evidence of the development determination of Yulin and even Shaanxi. But there are also views that Yulin still has many limitations to break through in order to truly achieve the upgrade. As the second largest coal-producing city in China, Yulin is situated in the largest reserves of high-quality coal resources in China. Coal and coal chemical industry account for more than 85% of the city's industrial output value. In order to break through the restrictions of high dependence on resources and low-end industrial development, the local government further proposed the idea of "three transformations": coal to electricity, coal to energy-carrying industrial products, coal, oil, gas and salt to chemical products. A number of projects emerged at the historic moment.

In view of this, the Opinion points out that the 13th Five-Year Plan takes more than half of the time, and that the problems of slightly lagging construction progress, low conversion rate of resources and short transformation industrial chain have not yet been fundamentally reversed. In order to speed up the transformation, Yulin will, on the basis of comprehensive verification of the construction of the coal resources transformation project transferred by agreement, take targeted measures to accelerate the progress of the project construction; promote the continued transformation of the rich coal resources of the project and improve the conversion rate of resources; promote the extension of the conversion project products downstream and extend the industrial chain; and fourth, clean up the difficulties. Implementing the coal mining rights of conversion projects, effectively eliminating the phenomenon of "occupying but not mining" and "only mining but not transferring".

In view of the new construction projects, the Opinion requires that the supporting coal mines and transformation projects must be put into operation simultaneously. If the coal mine is completed and put into operation before the conversion project, before the latter is put into operation, Yulin Municipal Municipal Government will study and formulate special measures to use the part that exceeds the conversion coal for other major projects without allocated resources. For those who have not implemented the existing projects on schedule, the Yulin Municipal Government will urge them to put into operation within a time limit. The overdue conversion projects will share in supporting coal mines by other conversion projects or provide conversion coal by supporting coal mines to other projects according to the proportion of the scale of the unfinished transformation projects to the scale of the projects to be built. For projects that are really difficult to land, Yulin Municipal Government will recover resources.

"To solve specific problems of different projects, we can say that this Opinion is very detailed." Party Hongwei, Director of Coal and Electricity Department of Shaanxi Development and Reform Commission, responded to reporters. In addition to eliminating the persistent diseases, Liu Zhongmin, academician of the Chinese Academy of Engineering and director of the Dalian Institute of Chemicals of the Chinese Academy of Sciences, thinks that the Opinion has a profound meaning behind it. "Although Yulin has the best coal resources in the country, the local government did not do much in this area in the early stage, leading to the disjunction between industrial development and local coordination. For example, a coal-to-olefin plant with a capacity of billions of dollars can actually only bring about employment for more than a hundred people. In the future, if we want to create more jobs and other opportunities, or to achieve sustainable development, selling coal is certainly not the way out. In the long run, it is right to speed up the transformation of ideas.

The publication of opinion is not the first time that the local government has taken action because of both benefit-driven and technological bottlenecks and external constraints. A person close to the local authorities told reporters that as early as June 2018, the main leaders of Yulin took the lead in convening a meeting of enterprises, emphasizing the problems of low conversion efficiency and short transformation chain. "At that time, a lot of measures were also mentioned, such as setting up a coal conversion fund with 30 billion yuan, enterprises that failed to complete the transformation on schedule, and even have to invest proportionally. For example, for enterprises with insufficient conversion, they should take part of the coal resources that have never been converted and sell them to other conversion projects at cost price. But to be honest, we haven't seen any significant results in the past six months.

Take the 10 million tons coal mine of a group in Yulin as an example, the person said that it was originally built for supporting a large coal chemical engineering project. The actual use of coal in a year is only more than 3 million tons, equivalent to only 30% of the conversion rate. "As far as I know, compared with many projects, the proportion is not bad."

"Local governments have done a lot of work, but the effect is not obvious, otherwise they will not issue this Opinion." Yang Dongyuan, Vice President of Xi'an Institute of Clean Technology, Yandahua Institute, who participated in the formulation work, confirmed that. What hinders the transformation? Wang Xiujiang, deputy secretary-general of the Coal Chemical Committee of the China Petroleum and Chemical Industry Federation, believes that some enterprises can not be excluded from seizing coal resources in the name of "transformation", but at the same time, there are some real constraints. For example, Shanxi low-rank coal pyrolysis and Yankuang coal oil production projects have been included in the 13th Five-Year Plan for deep processing of coal, so it is impossible for enterprises not to develop. Only in technology, technology, equipment and so on, it still needs to be optimized.