Chinese mining companies have huge receivables

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Chinese mining companies have huge receivables

(Chinadaily.com.cn) 09:08, August 29, 2013

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Accounts receivables for China's major coal companies reached 330.8 billion yuan ($54.03 billion) at the end of June, the highest level over the past decade, official industry figures showed.

According to China National Coal Association, rising accounts receivables — generally invoices raised by business to ask for payment from customers — has been a widespread problem for domestic coal miners because many of their customers are not paying them on time.

From January to July, total profit from coal mining tumbled 43.8 percent over the same period from the previous year, extending a downward trend that began in March, data according to the National Bureau of Statistics.

Ren Haoning, an energy industrial analyst with China Investment Consulting, said if coal firms are unable to collect on payments in a timely fashion, they will face capital shortages and possibly bankruptcy.

Another problem is that coal companies have been forced to sell goods on credit. Downstream sectors such as power generation producers and steelmakers are either reluctant to make payments on time or have difficulties making payments, said a coal trader to the National Business Daily.

（Editor：LiXiang、Zhang Qian）