China's Shanxi will cut 20 million tonnes of coal capacity, warns of social unrest

A worker operates a vehicle at a coal mine on the outskirt of Xiaoyi, China's Shanxi province, August 3, 2016. REUTERS/Jason Lee

BEIJING (Reuters) - China’s Shanxi province, one of China’s largest coal producing regions, will cut coal capacity by 20 million tonnes this year, a member of a parliamentary advisory body said on Tuesday, warning that the job cuts have caused social problems.

Wang Wenya, who is a member of the largely ceremonial but high profile parliamentary advisory body, said the cuts are a “grave” task for the province.

Shanxi would need to spend as much as 3.4 billion yuan ($493 million) to relocate 22,000 employees affected by the 2017 capacity cut and based on average salary data, she estimated.

The cut equates to about 13 percent of the nationwide cut targeted by the government for 2017.

Reporting by Beijing newsroom and Hallie Gu, editing by Louise Heavens; writing by Josephine Mason