China's Shanxi Province Seeks Coal Mining Consolidation

China's top coal-producing province, Shanxi, will embark on a programme to create several giant mining groups as it continues shutting small mines, state media reported on Sunday.

Shanxi, in the country's north, has been plagued by deadly accidents in smaller mines, and the provincial government has announced plans to shut them down to boost safety and efficiency.

By end-2010, the province plans to cut the number of smaller mines from some 2,800 to 1,500, the official Xinhua news agency reported.

Shanxi officials also told Xinhua that, at the same time, they will seek to create up to eight major coal producers by encouraging mergers, buy-outs and re-organisations of existing miners by big operators.

The plan aims to "make big, powerful major coal corporations" that control more than 75% of the province's coal production, the report said.

By end-2010, Shanxi aims to create two or three coal corporations with annual production capacity of 100 million metric tonnes or more, and three to five corporations with annual production capacity of more 50 million tonnes, the report said.

By Chris Buckley, Reuters