BEIJING – China has hit the halfway point towards meeting it target of cutting coal mining capacity by 800-million tonnes a year by the end-2020, the state planner said on Friday.
Tackling industrial and mining overcapacity has been a priority for Beijing to make China's economy more efficient and environmental friendly, and in its five-year plan for the 2016 to 2020 period, the government set a goal to reduce its coal production capacity by that amount.
Now, with coal mining capacity cuts of 111-million tonnes in the first half of 2017, the total reductions for the period have been brought to 400-million tonnes, state planner National Development and Reform Commission (NDRC) said.
The massive capacity cuts has burdened coal producers with mounting debt, and roiled markets as utilities have struggled to find enough supply. Thermal coal prices in China have more than tripled since the start of 2016 due to the curbs on production.
NDRC said this year it has been easier for coal companies to get bank loans, and that producers have had fewer bad loans and reported fewer cases of unpaid wages to workers.
Reflecting the improved situation for miners, the debt ratio for China Shenhua Energy Co - listed unit of state-owned Shenhua Group, China's biggest coal producer - fell to around 1.6 by the end of the first quarter this year from 5.26 at the end-March last year.
Four sectors - coal, steel, cement and non-ferrous - owed a combined 10.2-trillion yuan ($1.5-trillion) in debt as of 2016, according to a government document.
NDRC will make more effort to help coal producers deal with their debt and give workers laid off from coal mines professional training, it said.
China produced 3.64 billion tonnes of coal in 2016, done 9 percent from the previous year, according to the National Bureau of Statistics.