Mergers, acquisitions facilitate Shanxi's coal capacity cutbacks

Shanxi province, China's major coal-producing region, plans to phase out all small coal mines with an annual production capacity of less than 600,000 metric tons by the end of 2020, according to the local authorities.

The coal mines will be required to carry out mergers and acquisitions (M&A) to increase efficiency in the sector. Coal mines with capacity reaching or exceeding 600,000 tons are also encouraged to reduce overall capacity through M&As, said the guideline published on the provincial government's official website.

After the M&A activities, each of all coal mining enterprises in the province should have an annual capacity of more than 3 million tons by the end of 2020, according to the guideline.