China to Further Consolidate Coal Operations

China plans to create about 10 mega coal companies by 2020 through mergers and reorganizations as part of its long-standing efforts to cut overcapacity, according to China Daily. The country is preparing guidelines to overhaul the sector and it hopes to create several new large coal companies with an annual capacity of 100 million metric tons (mt) by 2020, explained Wang Xiaolin, deputy director of the National Energy Administration (NEA).

Six Chinese producers have already attained that production level, said Zhang Hong, deputy secretary-general of the China National Coal Association.

The plan is part of the government’s effort to optimize coal production. Last year, it set a target of reducing the number of coal producers by almost half to 3,000, with mines that produce 50 million mt or more generating 60% of industry output.

In addition to the 10 or so mega miners, China also set two-year objectives for regional development, Wang said. As the world's largest coal producer and consumer, China has been accelerating the pace of reducing its excess capacity.