By April 14, 2017 Read More →

China coal producers consolidating, creating 10 ‘mega’ coal companies

China coal

A number of China coal companies, even its largest producer the Shenhua Group, are undergoing restructuring this year.

China coal production capacity could reach 100 million tonnes annually at each of 10 mega producers

China is looking to create 10 mega cola producers by 2020 as part of its effort to consolidate the industry and tackle overcapacity, according to a report that cited an energy official in the China Daily on Friday.

Wang Xiaolin, deputy director of China’s National Energy Administration, said Beijing was preparing guidelines to create 10 new China coal giants, each with annual capacity of more than 100 million tonnes.

According to the China Daily report, the country already has six companies that have production capacity over 100 million tonnes.

The China Coal Trade and Distribution Association says the new guidelines will compel coal mining regions to consolidate smaller mines over the next two years as well as close mines that are not restructured.

The association says large state-run coal mining companies, including China’s biggest coal producer the Shenhua Group, will undergo restructuring.

Reuters reports China is currently running a program aimed at tackling supply gluts in the coal sector.  Beijing is looking to shut or consolidate smaller coal mines, reducing production capacity by 500 million tonnes.

This year, China coal production is to be cut by at least 150 million tonnes, which has driven up coal prices more than 25 per cent since the beginning of the year.



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