Baotailong New Materials Co., Ltd. said its Baotailong No.2 mine has received approval for joint trial operation, a move that will significantly enhance the company's raw coal self-sufficiency and reduce reliance on external purchases.

The mine, located in Xinxing district of Qitaihe city, Heilongjiang province, has an annual capacity of 300,000 tonnes per annum, with the trial period running from July 14, 2026 to January 13, 2027, according to a company filing.

Together with the already operational Baotailong No.1 mine, and the No.3 mine and Dayan mine now in trial operation, Baotailong's raw coal self-supply system is taking shape, helping hedge against upstream price volatility and improve future profitability.

Baotailong is the largest independent coking enterprise in northeast China and a leading coal chemical firm in Heilongjiang. It holds mining rights for all seven of its coal mines, with total resources of 476.12 million tonnes and combined capacity of 4.2 million tonnes per annum (Mtpa).

Currently, Baotailong has three operational mines -- No.1, No.5 and Baozhong -- and two mines in trial operation -- Dayan and No.3 -- with combined capacity of 2.1 Mtpa.

According to its 2025 annual report, the Donghui mine is in pre-construction preparation, apart from the No.2 mine.

Coke prices have been strong this year, with ten consecutive rounds of price hikes from late March to early July, nine of which were implemented. However, the trend has not been reflected in Baotailong's earnings.

The company expects a net loss attributable to shareholders of 97 million to 162 million yuan for the first half of 2026, compared with a profit of 98.88 million yuan a year earlier.

Baotailong attributed the loss to lower coal prices and output year on year due to market conditions, higher mining costs, and low capacity utilization in its coking business, which started oven heating in early June.

As its mines gradually come on stream, Baotailong's capacity release is expected to fill regional coal supply gaps and lower coking costs, potentially driving a turnaround in performance.

Standardized mine construction at the No.3 mine has shown early results, with its dispatch center achieving real-time monitoring and data inspection of underground operations. The No.2 mine can adopt similar practices during trial operation, advancing safety, environmental and occupational health inspections.

However, coking coal prices remain volatile due to import gaps and safety inspections at producing regions. While higher raw coal self-sufficiency can partly offset cost risks, weak steel demand and thin mill margins may cap coking product price upside.

Under China's dual-carbon goals, coal and coking sectors face increasingly stringent environmental regulation. Baotailong's No.3 mine has passed environmental, water conservation and occupational health inspections. The No.2 mine must also integrate green mining principles throughout its trial operation, requiring continued investment in emission controls and production processes to meet national and local policy requirements.