The Chinese government faces a delicate balancing act when it comes to controlling the country’s coal production. As it stands, overproducing coal has led to its devaluation, but according to energy analyst Luther Lu, slashing production by shuttering coal mines would lead to mass layoffs. Lu believes the Chinese government took a step in the right direction when they put forth a 2016 mandate to cut coal production by limiting the number of days each mine could operate. The concern now is how China can fine-tune its output restrictions so they don’t cut too much and become dependent on imports. Luther Lu sits down with GLG to discuss the state of the Chinese coal industry and what China can learn from the West.
Since 2010, Luther Lu has served as the Founder and Managing Director of Coal Sentinel Inc, a market research provider for the Chinese and global coal industries. Lu provides insights on coal industry trends to U.S. hedge funds by way of a weekly newsletter. An authority on the Chinese coal, steel, and iron ore industries, Lu is also a respected voice in Chinese real estate and macroeconomic trends. He has extensive experience covering the global coal market and the coal equity market for Mercuria Energy Trading, FBR Capital Markets, and Exelon. Lu holds an MBA from the University of Texas and a BA in Material Science and Engineering from the University of Tennessee.