May 6, 2016 / 2:35 AM / 3 years ago

UPDATE 1-China vows stronger action against illegal coal mining

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BEIJING, May 6 (Reuters) - China will take stronger action against illegal coal projects as it tries to tackle a massive capacity glut in the sector, the country’s state planning agency said, after ordering the closure of 38 projects.

The National Development and Reform Commission (NDRC) had ordered the immediate closure of the projects for breaching industry policies, it said in a notice posted on its website (http://www.ndrc.gov.cn) on Friday.

“Recent results of a special inspection of illegal coal mine construction showed that there are still a small number of illegal projects under construction or in operation, and (we) must pursue rectification work with a more resolute attitude, stronger measures and stricter punishments,” it said.

It said it would set up special inspection teams to tackle illegal coal production and, together with media outlets, would also make unannounced visits to coal mine regions.

The NDRC has been holding regular meetings on cutting excess coal capacity in sector hit by an economic slowdown and with a concerted campaign by the state government to switch to cleaner sources of energy.

Loss-making coal firms have been forced to cut salaries and lay off workers, and the energy regulator said in February that it expected more than 1,000 mines to be shut down this year alone.

According to the China National Coal Association, the country has enough mines in operation to produce as much as 5.7 billion tonnes of coal a year. Production in 2015 stood at 3.68 billion tonnes, down 3.5 percent from the previous year.

China said in February that it aims to shut 500 million tonnes of surplus coal capacity in the coming three to five years, and it also pledged to ban all new mine construction for the next three years.

It has also cut the statutory working hours for miners to help control supplies. (Reporting by David Stanway; Editing by Ed Davies)

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