January 19, 2018 / 12:44 AM / 2 years ago

China's major coal province to cut 23 million tonnes of capacity in 2018

FILE PHOTO: A worker loads coal onto a cart at a coal mine in Taiyuan, Shanxi province, China November 4, 2010. REUTERS/Stringer/File Photo

SHANGHAI (Reuters) - China’s Shanxi province, responsible for about a quarter of the country’s total coal output, will cut its production capacity by 23 million tonnes this year as part of its efforts to streamline the sector, it said on Friday.

Shanxi, which produced 832 million tonnes of coal in 2016, has been part of a national campaign to reduce coal capacity by around 500 million tonnes over the 2016-2020 period in order to bolster prices and improve efficiency in the sector.

In a report published on its official website, the northern Chinese province said it would intensify a restructuring program this year and try to shut down or consolidate mines with an annual production capacity of less than 600,000 tonnes.

Citing an official with the province’s land and resources office, the report said Shanxi had canceled 56 coal mining licenses in the past five years, resulting in production capacity cuts of 51 million tonnes per year.

The province will also invest more in coalbed methane exploration. Proven reserves of coalbed methane have reached 578.4 billion cubic meters (cu m), 88 percent of the country’s total, said Zhou Jianchun, head of the Shanxi land and resources bureau.

Shanxi is targeting proven reserves of more than a trillion cu m by 2020, and will aim to raise annual output to 20 billion cu m, it said. It extracted 10.1 billion cu m of coalbed methane in 2015.

Reporting by David Stanway; editing by Richard Pullin

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