World eagerly watches Chinese coal integration

World eagerly watches Chinese coal integration

Beijing's recent decision to consolidate China's highly fragmented coal industry into a few major companies has drawn the attention of foreign investors. Currently, China's ten largest coal companies account for only 15% of the country's total coal production. Beijing's intent with the consolidation effort is to heighten the share of major companies in overall production to more than 50%. The efforts should also increase both the safety and productivity of mines as the larger companies look to modernize their facilities. The government's plan calls for the formation of several conglomerates that will each have annual production capacities of 100 million tons. Beijing is reportedly backing Shenhua, China Coal Energy and Yanzhou Coal in this respect. Furthermore, 13 regions, including the provinces of Shanxi, Shaanxi and Henan provinces and the Inner Mongolia Autonomous Region, are being considered as the bases that could be operated and managed by several conglomerates.