China’s major coal-production region slashes overcapacity
Guizhou, one of the country’s major coal-producing provinces, shut down 183 mines in 2015 in a bid to cut obsolete capacity, according to local authorities.
Through closures, mergers and acquisitions, Guizhou has reduced its number of collieries in operation and under construction to less than 800 from about 1,700 since 2013, said a spokesman with the provincial energy administration.
It aims to close more than 80 others this year, said the spokesman.
Guizhou is the largest coal producer in southern China, with the country’s fifth largest proven reserves. The province’s move is part of a national campaign to cut overcapacity amid dwindling demand in the coal industry.
Earlier this month, the State Council issued a guideline saying no new coal mines would be approved in the following three years and the country will shut down 500 million tonnes of capacity and consolidate another 500 million tonnes into the hands of fewer but more efficient mine operators in the next three to five years.
Another coal-producing giant, north China’s Shanxi Province, has decided to keep production under 1 billion tonnes per annum for the next five years. Its production in 2015 amounted to 944 million tonnes.
Shanxi has produced about one fourth of China’s coal since 1949. However, the industry had suffered losses for 18 consecutive months by the end of 2015, beginning in July 2014.