China is going to launch legislationon coal reserves, but there is still much disagreement over methodand utility of the reserves.

    According to the government's plan, the legislation it is expected to be completed during the period of 2008-2015. It will mainly cover principles of coal resources reserve, subject of thereserve, reserve use procedure, and supervision and inspection of thereserve.

    China has not yet decided whether to reserve resources or actual goods. An official in charge of China National Coal Association (CNCA) told Xinhua reporter that the government's original plan is to reserve resources, but in view of tight supply of coal that happened many times this year, some people have suggested reserving actual goods.

    China hasn't made strategic reserve of coal at present, only some enterprises keep a certain quantity of coal in stock.

    The legislation is considered a signal that the government is now tending to reserve resources.

    Renowned energy economist, Professor Lin Boqiang, director of Xiamen University's China Center for Energy Economics Research (CCEER), expresses his opinions that compare with oil, which needs to be imported from abroad, coal resource is abundant in China, which can meet the market demand. The current tight supply of coal is caused by many reasons, but may not need to carry out spot reserves to solve.

    The more important thing is to grasp and regulate the rational exploitation of coal resource and the government should focus on thereserve of resources rather than the reserve of actual goods,Professor Lin stressed.

    Dr. Qian Pingfan, an industrial economist at the State Council Development Research Center, has different views. He said that the more important function of establishing the coal reserve system is to stabilize coal prices and combat illicit accumulation by the way of selling part of the stored goods when the prices rise sharply.

    According to coal industry experts, the spot reserves cost high and are very hard to implement. Steam coals will have oxidation spontaneous combustion during the course of storage, and the coking capacity and calorific value of coking coals will be reduced. They are not optimistic about the spot reserves of coal.

    China has abundant coal resources with scattered distribution. All types of coal with high quality have been explored. Most of them are of low sulfur, low-medium ash and medium-high thermal value. Its proved coal reserve is over 1 trillion tons, of which 188.6 billiontons can be used directly. This means that the coal can be mined for about 80 years according to the annual output of 2.52 billion tons in2007.

    The exploitation of coal resources is at a low level in Chinaal though the potential of coal reserves is high. Most of the coal resources are discovered through general survey. China's per capitareserve is below the world's average level. It becomes important for China to economize the coal resource and keep enough reserves forfuture use. Some experts suggests that China should further intensify its efforts to the exploration of coal resources, increase the geological reserves of coal, do a good job in building state-level large-scale coal bases, intensify protective mining for the specialor rare types of coal which are of significance to the national economy, ensure the long-term supply of special or rare types of coal, adopt rational mining sequence and methods and proper ore-dressing technique, rationally develop, utilize and protect the coal resources, standardize the production and marketing of coal, and speed up the pace of "going out" to explore coal resources abroad. All these might be taken into consideration in the legislation.