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Hebei Qian'an Chemical Co., Ltd. recently announced plans to expand its coal supply by starting construction on a 1.8 million-ton-per-year coal mine in the western part of Inner Mongolia’s Shaogen Coalfield, with additional plans to develop an open-pit coal mine in Hesgwula, Ximeng. This initiative aims to secure a stable supply of raw coal for its chemical production, which heavily relies on coal as a key input.
According to company officials, the decision was driven by urgent necessity. Over the past few years, domestic coal supply has become increasingly unstable, with prices rising sharply—sometimes exceeding 700 yuan per ton during factory relocations. These challenges have led to production delays and operational inefficiencies. Faced with these issues, the company opted to take control of its raw material supply rather than overhaul its entire production process.
The shift became possible after the recent reforms in coal mining rights allowed fertilizer companies to acquire mining licenses. After significant efforts, Qian'an secured the rights to the West District coal mine in Chifeng City, Inner Mongolia. The mine has a resource reserve of 1.9258 billion tons and an annual capacity of 1.8 million tons, enough to support operations for about 32 years. Construction officially began last month, and the company is also exploring an open-pit mine with a 10 million-ton annual output for added security.
With a stable coal supply, Qian'an is now looking ahead to future expansion. It is currently building a methanol project with a total scale of 600,000 tons, using advanced German technology from Future Energy Company. The project will be located near the new coal mine and is expected to produce 200,000 tons of methanol and 1,300 tons of sulfur annually. With an estimated investment of over 800 million yuan and a 36-month timeline, the project is projected to generate 1 billion yuan in annual sales and 300 million yuan in profits and taxes.
Looking further, the company plans to invest 9 billion yuan to build facilities that will produce 600,000 tons of synthetic ammonia, 1.04 million tons of urea, and 1.2 million tons of methanol.
This trend of self-sufficiency is not unique to Qian'an. Many chemical companies are turning to “self-prepared†solutions, such as building their own railways, mines, salt mines, and power plants, to ensure supply stability. While this approach helps mitigate risks and improve resilience, it also raises concerns about reduced specialization and efficiency. Companies are now taking on roles traditionally managed by external suppliers, potentially leading to inefficiencies and increased complexity.
From a broader economic perspective, this shift reflects a breakdown in contractual relationships and market mechanisms. Instead of relying on specialized suppliers, businesses are becoming more self-reliant, which could hinder the development of a truly competitive and efficient market economy. The long-term implications of this trend remain uncertain, but it signals a growing reliance on internal resources at the expense of external collaboration.