January 9, 2017 / 4:07 AM / a year ago

China top coal province sets out consolidation plan

BEIJING, Jan 9 (Reuters) - China’s Shanxi province, the country’s top coal producer, plans to cap output and consolidate the industry around big producers over the next four years in a bid to boost effiency, according to a blueprint by the provincial government.

Major producers will be set up with a separate focus on thermal coal, coking coal and anthracite, while smaller producers will be merged into larger ones, the local authority said on its official website (www.shanxi.gov.cn).

The province’s annual coal output would be capped by 2020 at 1 billion tonnes and capacity at 1.2 billion tonnes annually by 2020. Shanxi produced nearly 1 billion tonnes of coal in 2015.

Shanxi, in the country’s north, accounts for about a quarter of coal production in China, which has been working to curb overcapacity and a supply glut of the fossil fuel as part of a longer term plan to shift to cleaner fuels.

For thermal coal, which is used in power generation, Datong Coal Mining Group and China Coal Pingshuo Group will become the top hubs, each with an annual capacity of 100 million tonnes, the province said.

Shanxi’s central region was expected to become a coking coal base. Shanxi Coking Coal would be the top producer, operating 107 mines with an annual capacity of 181 million tonnes. It also has coal washing capacity of 120 million tonnes.

The province currently supplies coking coal to China’s top steel mills and also exports to Japan and Korea.

Shanxi’s eastern regions will focus on anthracite, a high quality coal with fewest impurity and highest calorific value. Yangquan Coal Industry Group, Lu‘an Mining Industry Group and Jincheng Anthracite Mining Group will be the top three producers tapping the province’s largest mine Qinshui, the report said.

Reporting by Chen Aizhu and Beijing newsroom; Editing by Richard Pullin

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