November 10, 2010 / 2:17 AM / 9 years ago

China to form larger-size coal miners 2011-2015

BEIJING, Nov 10 (Reuters) - China will further consolidate its coal industry by forming 10 coal firms with about 100 million tonnes of annual production capacity each by 2015, the National Energy Administration said late on Tuesday, largely in line with earlier reports.

The country will also establish 10 firms that each produce some 50 million tonnes per year and raise the number of mines with capacity of around 10 million tonnes each to 60 in five years, the administration said in a press release.

There are only two Chinese coal firms — Shenhua Group Corp and China National Coal Group — that have production capacity above 100 million tonnes per year.

China is the world’s largest coal producer and consumer, but its fragmented coal industry has long been plagued with a poor safety record, inefficiency and pollution. Many miners, unsure about their long-term control over coal resources, have invested less on safety, technology and environmental protection.

Beijing has long been aiming to consolidate the sector but progress had been slow due to reluctance and resistence from local governments, partly because some local officials were financially involved in mine operations.

The clampdown has been hastened since last year when several major coal provinces wielded more administrative measures, beefing up state control of coal resources while alienating private investors.

The government aimed to shut down 1,539 small coal mines with total production capacity of 121.67 million tonnes this year, planning to cut their number to less than 10,000 by the year-end.

It had closed 1,259 mines and 112.96 million tonnes of capacity as of mid-September. (Reporting by Jim Bai and Aizhu Chen; Editing by Jacqueline Wong)

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