China has warned it may step on the brakes as a voracious appetite for energy has led to frantic and uncontrolled investment in new coal mining capacity, according to state media.

Reflecting the concerns of a nation where mass deaths in the mining industry happen with appalling regularity, the China Daily said the investment drive is concentrated in small operations that have the poorest safety record.

"The investment in coal mines is overheating. The spending spree should be cooled down,'' said China Coal Industry Development Research Center director Guo Yuntao.

In the first quarter, investment in the industry surged 86 percent from a year earlier to 7.6 billion yuan (HK$7.1 billion). The rampant investment is especially serious in small coal mines run by townships and counties.

"Many of these coal mines have skipped the necessary government approvals before starting construction,'' said Guo.

These mines account for close to 40percent of China's total coal output - and also for a disproportionate number of the accidents.

Just last week, at least 45 workers were killed in Hebei province when a blast ripped through a medium-sized coal mine that had previously been the scene of a large-scale deadly accident.

But just as important as the safety issue is concern about lack of efficiency among the small miners.

``They want better efficiency in terms of recovery of the coal,'' said AME Mineral Economics coal-sector analyst Graham Wailes in Sydney. ``Some of the small miners just take the best of the coal without being fully capable of exploiting all the resources.''

Investors are gambling that high prices, which have risen more than 50 percent in the past two years, will last.

But they may be deterred by government data suggesting demand for coal will gradually decrease.

Beijing is striving to rein in rapid development in industries such as cement, steel and coal-fired power plants, which in turn will force growth in the demand for coal to slow, the China Daily said.

Even so, a government order to cut investment would come at an awkward time after months of power shortages.

In the first three months of the year, 26 of China's 31 provinces, autonomous regions and municipalities experienced brownouts, said the paper.

Analysts said this might be due to bottlenecks in the rail system carrying the coal rather than lagging production.

``Some of this may have been due to problems with transport,'' said Wailes. ``They may have produced the coal but can't get it to the power stations.''

China's thirst for energy may start to flag as early as this year, according to some predictions.

Mainland coal consumption is expected to increase by 6 percent this year to 2.1 billion tonnes, slower than last year's growth of 12 percent, according to the China Coal Industry Association.

If that continues, producers may find a production glut and falling prices when new coal projects start operation over the coming years.

AGENCE FRANCE-PRESSE