Coal industry restructuring to continue

China will shut down 625 coal mines with a total production capacity of 23.47 million tons by the end of this year in a move to further restructure the country's mining industry, according to a statement from the National Energy Administration.

The statement said the industry will eliminate outdated production methods, improve facilities at viable mines, conduct mergers and acquisitions and shut down illegal collieries in order to meet a government requirement to prevent deadly accidents and reduce carbon dioxide emissions and pollution.

Figures show that during the 11th Five-Year-Plan period (2006-2010), the number of small coal mines and their output fell rapidly.

The country has shut down 9,616 small coal mines with an annual production capacity of 540 million tons. In 2011 alone , 407 coal mines with a production capacity of 24.63 million tons were closed.

Outdated methods for coal extraction need to be replaced by modern techniques, said Wu Yin, deputy director of the National Energy Administration.

He said in the last year China has added new coal production capacity of 95 million tons by establishing new mines with advanced technology.

According to the 12th Five-Year-Plan (2011-15) for the coal industry, China is expected to be capable of producing 4.1 billion tons of coal by the end of 2015. The plans, though, call for keeping the output within 3.9 billion tons to control energy use and reduce carbon emissions.

Wu said China will form 10 large coal companies that are capable of producing 100 million tons of coal a year and another 10 companies that are capable of producing 50 million tons a year. These 20 companies will be responsible for 60 percent of the country's output of coal.

"China will continue to promote mergers and acquisitions in the coal industry," Wu said. "We will work to develop large coal companies and shut down small coal mines to eliminate outdated operations."