By ELAINE KURTENBACH 01.25.08, 8:30 AM ET

SHANGHAI, China -

China’s Transport Ministry ordered ports on Friday to temporarily stop loading coal for export as the country struggles to meet domestic needs amid mounting power shortages.

The coldest, snowiest winter in decades has left millions of Chinese without heating and running water, causing mounting losses from power shortages and other damage.

The Transport Ministry’s emergency notice, posted on its Web site, ordered railways and other transport networks to make hauling coal and food a priority in coming weeks. Ocean shippers should stop loading coal for export and divert shipments, if needed, "for domestic thermal coal requirements," it said.

It warned of "severe" consequences for failing to comply with the order, to stay in effect through the Lunar New Year holiday in February and the annual session of the national legislature in early March.

It was unclear what amount of coal shipments would be affected by the order.

On Wednesday, the economic planning agency ordered the country’s utility companies and coal suppliers to cooperate in combating power shortages that have forced more than a dozen provinces to ration electricity.

Chronic wintertime shortfalls of coal, used to fuel three-quarters of China’s electricity supply, have been aggravated by disruptions to transport networks due to unusually heavy snow.

In some areas, snow has also damaged power grids. Storms felled three power transmission towers Wednesday along a major line of the Three Gorges Dam, disrupting a link in central China’s transmission system, the official Xinhua News Agency reported.

Coal shortages have worsened due to friction over prices for coal and electricity. Coal suppliers are pushing for higher prices, while utilities have chafed at caps on electricity rates that prevent them from passing higher costs for coal on to customers.

The Transport Ministry notice said state-owned shipper Cosco Holdings Co. Ltd. was hauling emergency shipments of 760,000 tons of coal to help bridge the gap between faltering supply and soaring demand.

The shortages were expected to continue, with forecasts predicting continued cold weather and more snowfall for many regions of central and southern China.

Total damage from the prolonged cold temperatures and snow so far is estimated at $864 million, Xinhua reported.

Copyright 2007 Associated Press

Tags: energy investments

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