China, the world’s biggest producer of coal, announced its plans to form “super large” coal mining companies on Friday that will compete on the global stage and will modernise the industry.
In a statement, the country’s National Development & Reform Commission (NDRC) said that by the end of 2020 China would create a number of mega-miners, with the capacity to produce 100 million tonnes of coal per year each. The purpose of this is to better compete on the global market and modernise the sector.
According to the National Energy Administration, China’s 4,000 coal mines had capacity to produce 3.41 billion tonnes a year, however only six of the country’s mining companies are able to produce more than 100 million tonnes a year.
As a result of the proposed plans, shares in Chinese coal companies jumped to a three-month high, with the CSI SWS Coal index rising by as much as 4.6 per cent on Monday.
Xinhua, the state-owned news agency, said: “Coal firms are also encouraged to conduct M&As with players in related sectors, including power, coal, chemicals and steel, to fully integrate their resources in the wider industrial chain”.