As the consolidation of Shanxi's coal industry nears completion, officials with in the National Development and Reform Commission (NDRC) and State Administration of Energy (SAE) have indicated that the country will move to speed up consolidation of the coal industry across the rest of the country.

At a press briefing held in Beijing yesterday, members of the NDRC and SAE appeared alongside Shanxi government officials to discuss the progress of the consolidation and restructuring of the province's  dominant coal industry.

At the briefing, the deputy governor of the province, Chen Chuanping, revealed that "So far, 98 percent of coal mines have signed merger or reorganization agreements and 80 percent of mining licenses have been altered." He went on to proclaim that the coal mining industry in the central Chinese province "had been fundamentally restructured."

The number of coal mines in Shanxi has been reduced from 2,600 to 1,053, and mining companies, from 2,200 to 130.

The consolidation has not only led to increased output, but also led to safety gains. Despite an accident at a coalmine belonging to the Shanxi Coking Coal Group in February 2009 which caused the death of 74 people, CCTV quoted Chen as saying that "accidents and deaths were down by 40 and 32 percent respectively compared to 2008."

When questioned about whether the consolidation was simply a euphemism for the nationalization of the province's coal sector, Chen pointed out that the question of whether a company will exit the market is decided by its scale, not form of ownership.

He went on to add that currently there are both state-owned and private-owned coal mines in Shanxi. He claimed that of every ten coal mines, 2 would be state-owned, 3 would be privately-owned and 5 would be of mixed ownership.

Chen went on to say that, the government has "balanced the interests of different stakeholders" by refunding outstanding resource exploration fees and providing appropriate compensation to former mine owners.

An official with the State Administration of Energy indicated that the central government plans to speed up the consolidation of the coal mining industry throughout the rest of the country.

Shanxi is the core base of China's coal industry. Over the past sixty years, it has produced 11 billion tons of coal, accounting for one quarter of total nation output.  Of this  amount, eight bllion tons has been transported to other provinces.

The coal industry has dominated Shanxi's economy over the past 60 years. Along with economic growth the industry has also given the province a reputation for being home to some of the most deadly mines in the world, a place where mining accidents claim thousands of lives every year.
 
In lobbying for the extension of the Shanxi consolidation push to be implemented across the rest of the country, Wu Yin, Deputy Minister of the State Administration of Energy said "If the consolidation ratio of coal mines is raised by one percentage, the rate of deaths due to coal mine accident will accordingly be reduced by 0.58 percent. The more the industry consolidates, the less accidents there will be."

"Theoretically, when the four biggest companies account for 40% of the whole industry, and the eight biggest, 60%, there will be healthy coalmine sector and orderly competition." Wu said.

Currently, according to figures released at the briefing, the four biggest coal companies only make up approximately 20% percent of the Chinese market, and the eight biggest, 28%.

Source
NDRC:Report(Chinese)
China News: Report (Chinese)