Cost pressures evident in China’s coal sector

Albeit marginally, China was able to bring down the debt level in its coal-mining industry after a deleveraging campaign that ended in 2019. However, as the pandemic shook the economy in 2020, the industry’s debt level rebounded in the year. Several defaults reminded investors that cost pressure and high debt levels faced by the coal producers remain key challenges in the sector. To understand the financial and cost positions of coal producers, Wood Mackenzie evaluated the performance of companies involved in coal-mining business from both the listed and unlisted sectors. This insight highlights the cost differences among companies in the two sectors.