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The reporter recently interviewed Hebei Qian'an Chemical Co., Ltd. to learn about the company’s efforts to secure a stable coal supply for its production. In response to rising coal prices and supply shortages, the company has launched a major expansion plan in Inner Mongolia. It is currently constructing a 1.8 million-ton-per-year coal mine in the western part of the Shaogen Coalfield in Inner Mongolia, with plans to develop another coal mine in Hesgwula, Ximeng. The new open-pit mine will help meet the raw material needs of the company's chemical production.
According to the company's officials, this move was not voluntary but rather a necessity. All of Qian'an's products rely heavily on coal as a raw material. Over the past few years, domestic coal supply has become increasingly unstable, with prices soaring to over 700 yuan per ton at times. This instability led to production delays and put the company in a difficult position. Faced with these challenges, the company had to choose between changing its production process or securing its own coal supply. After careful consideration, it opted for the latter.
Since the beginning of last year, reforms in the coal mining rights system have opened up opportunities for fertilizer companies to obtain coal mining permits. After extensive efforts, Qian'an successfully acquired the mining rights for the West District coal mine in Chifeng City, Inner Mongolia. The mine has a resource reserve of 1,925.8 million tons and an annual production capacity of 1.8 million tons, which can support the company’s operations for over 30 years. Construction on the mine officially began last month. To further ensure supply, the company also plans to develop an open-pit coal mine with an annual output of 10 million tons.
With a stable raw material supply in place, Qian'an is now looking toward future development. It is currently building a coal-to-methanol project with a total scale of 600,000 tons. The project uses advanced German technology from Future Energy Company, including CSP dry pulverized coal pressurized gasification equipment and chilling process pressure gasification technology. Located near the coal mine, the first phase of the project will produce 200,000 tons of methanol and 1,300 tons of sulfur annually, with an investment exceeding 800 million yuan and a construction period of 36 months. Once completed, the project is expected to generate 1 billion yuan in annual sales revenue and 300 million yuan in profits and taxes.
In addition, the company plans to invest 9 billion yuan to build a large-scale facility producing 600,000 tons of synthetic ammonia, 1.04 million tons of urea, and 1.2 million tons of methanol annually.
It is clear that many chemical companies are resorting to “self-provisioning†strategies to cope with unreliable supply chains. As a result, self-owned railways, mines, salt mines, and power plants have become common. While this approach helps companies reduce dependency on external suppliers, it also leads to reduced specialization and lower operational efficiency.
From a broader economic perspective, this trend raises concerns. If enterprises continue to build their own infrastructure, it could reverse the benefits of a specialized and efficient market economy. Instead of focusing on core competencies, companies may end up becoming self-sufficient, which could hinder innovation and productivity. Moreover, managing non-core facilities often requires additional resources and expertise, which may not be as effective as professional management.
The rise of company-owned facilities reflects a failure in contractual relationships and market coordination. This development is worrying for the long-term health of a competitive and dynamic market economy.