China's Coal Industry Development Research Center issued warnings of a Chinese coal industry on the verge of overheating.
A recent flurry of uncontrolled investment in the country's coal industry prompted Beijing to consider measures to rein in
investments despite
China's growing need for coal.
Fixed-asset investment in the coal sector increased more than 86% year on year to RMB 7.6 billion ($918 million) in the first quarter. The average investment growth of all industries during the same period was 22.8%.
The research center points out
China needs additional coal
production capacity of 50 million tons in 2005 and 500 million tons by 2010 to meet demand.
China's coal
consumption is expected to increase 6% this year to 2.1 billion tons. In 2004,
China's coal
consumption grew 12%.
The research center also claims that coal prices might drop and that mine accidents might continue to increase unless the government monitors
investments in the coal industry.