The State of Coal Industry in Northeast Asia
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By Tai Wei Lim

The State of Coal Industry in Northeast Asia

Aug. 10, 2017  |     |  0 comments

Power generation is the largest demand driver of coal use in Northeast Asia and many parts of the world. Japan is not alone in coal energy use and it is quite likely the regional coal industry will continue to persist for years to come even if Japan has mothballed much of its domestic coal industry. This article will briefly discuss some developments in the Northeast Asian coal industry that may have a regional impact on Japan, including Mongolia emerging as a source of coal.

Mongolia is bordered by Russia and China, and both these neighbours currently exert an economic influence on Mongolia as a supply source. China is also fast emerging as a major consumer of coal in the region. As it is located in a land-locked region, consequently, the major Mongolian export items to Japan consist mostly of minerals and textiles.1 Significantly, 43 percent of China’s coal resources are now drawn from Mongolia, an estimated total of 18,473.2 million tons of coal, and there are more than 5,000 companies from China with a total investment of USD 2.5 billion managing the energy trade, in addition to PetroChina’s USD 1.4 billion.2

China’s own growing need for coal will continue to drive its demand for domestic coal resources and even increase its imports. 70 percent of China’s energy demand is met by its own coal resources, approximately 114 billion tons in terms of overall size, and growing imports.3 To facilitate this growing demand for coal, Dalian for example has become a growing center of coal trading in China. Due to its own increasing demand, China is the world’s largest producer of coal as well, including the prolific mines that are found in the Northern as well as Northwestern regions of China.

Russia is another source of coal energy commodities, and the Putin administration has stopped operations at non-productive coal mines to make its energy supply more effective and to create industry models that can rival the most efficient coal industries globally.4 The coal mines closer to Japan are those found in West Siberia. According to statistics dated around 2014, Russia exported 110 million tons to Japan, the two fast-emerging economies of India and China, as well as the European Union (EU), while in the same period of time, Japan took in 121 million tons of coal from Indonesia, Australia, Russia, the US, and Canada.5

Interestingly, North Korea has quite larges reserves approximated at 12 GT as well as potentially undiscovered coal mines.6 Its problems in coal extraction are man-made. Years of isolation, sanctions, and juche (self-reliance) have not brought about rapid economic development or cutting-edge industrialization. Its low-cost labor potentially makes North Korean coal cheap but there can be political repercussions for taking Pyongyang’s resources. When the North Koreans tested a missile in early 2017, China turned back North Korean ships carrying coal for export.

Sulphur dioxide and nitrogen oxide are two by-products of coal use. They can cause respiratory problems and damage the eco-system.

The Great East Japan Earthquake 2011 has accelerated Japanese demand for coal since nuclear plants had to be shut down nation-wide. Since 2011, only one nuclear power plant located in Kagoshima, southern Japan has been turned back on. The current pro-nuclear government at the point of this writing is keen to turn on the others after safety inspection checks have been carried out. Japanese Clean Coal Technology (CCT) has been cited by the Turnbull government of Australia as a model for replacing their old coal power plants with cleaner versions.7 The Isogo (in southern Tokyo) electricity generation plant is seen globally as the cleanest coal power plant using the criteria of emissions intensity.8 Japan has 90 coal power plants in operation in 2017, has intentions to add more plants and this represents an opportunity for Australia since the Japanese purchase more than 40 percent of Australia thermal coal exports.9

The problems with tapping into Northeast Asian coal mines are typically political ones with geopolitical tensions in the region, including economic sanctions, maritime disputes, and issues of historical memories. There are other common problems in using coal as well. For example, acid rain results from coal use in the region. Sulphur dioxide and nitrogen oxide are two by-products of coal use. They can cause respiratory problems and damage the eco-system. Use of low-quality coal can worsen air pollution in the region. Densely-populated cities found in the Northeast Asian region intensify the problem further as energy use is concentrated in those areas. Heavy industries in areas like Shenyang or other regions producing cement and steel also add on to pollution generated by coal use. Driving urbanization are massive movements of people from the agricultural areas in the countryside to urban cities. This movement of people takes place on a massive scale in the context of China.

Future solutions to these challenges include the use of CCT or the use of scrubbers to remove pollutants, but they add to the cost of using coal energy for power generation. Coal itself can also be cleaned and the process lowers its sulphur and sodium content. Like its presence in seawater, sodium causes corrosion while sulphur contributes to acid rain formation. Another solution is to conserve energy or use energy efficiently to reduce wastage. These measures will lead to lower consumption of energy and reduce pollution as well. Substitution is another measure.

Coal can be substituted with much cleaner fossil fuels like natural gas or renewable energy resources like hydropower, wind, solar, and geothermal energy. According to a media report by a writer with the Australian Associated Press, renewable energy makes up 25 percent of Japanese power generation.10 Japan has also contributed to a cleaner regional environment by providing training on environmental monitoring to shore up more reliable data, technological sharing, and the promotion of transboundary cooperation. Networks of experts have also been formed amongst Northeast Asian states to look into this issue.


1. Enkhbold, V. (n.d.). Mongolia’s coking coal export potentials in Northeast Asia. The Association of Korean Economic Studies. Retrieved from, p. 3.

2. Campi, A. (2013). The new great game in Northeast Asia: Potential impact of energy mineral development in Mongolia on China, Russia, Japan, and Korea. Asia-Pacific Policy Papers Series, Edwin O. Reischauer Center for East Asian Studies. Retrieved from, pp. 3 and 4.

3. Ibid, p. 12.

4. Ibid, p. 9.

5. Enkhbold, p. 8.

6. Streets, D. G. (1991). Northeast Asia coal trading center set up in Dalian. Glocom. Retrieved from

7. Curtis, K. (2 Feb 2017). Look at Japan for clean coal power. News Limited. Retrieved from

8. Mealey, R. (1 June 2017). Japan spruiks 'highly efficient' coal-fired power plants as stop-gap measure to Australia's energy crisis. ABC News. Retrieved from

9. Curtis (2 Feb 2017).

10. Ibid.

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