By Wan Zhihong (China Daily)
Updated: 2007-11-30 09:28

China will not approve new coalmine projects with an annual capacity of less than 300,000 tons before 2010, according to the nation's top economic planning body.

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A newly published national coal industry policy by the National Development and Reform Commission (NDRC) said that in coal-abundant provinces such as Shanxi, Shaanxi and the Inner Mongolia Autonomous Region, proposed coalmines will need a production capacity of over 1.2 million tons for approval.

Besides raising entry requirements for coal and coalbed methane exploration and exploitation, industry consolidation, coalmine safety, technology improvement, energy-saving and environmental protection are also underlined in the coal blueprint.

A total of 13 large coal producing bases will be built in the country.

Large-scale State-owned coal companies are encouraged to expand operations by tapping into different regions and various industries. Mergers and acquisitions are also encouraged in the sector.

"With the new policy, the nation will use its coal resources more efficiently, and the coal industry will see more consolidations," Liang Dunshi, vice-chairman of the China Coal Transport and Distribution Association, said.

The NDRC in January released the outline of the 11th Five-Year Plan (2006-10) for the coal industry, saying the nation would develop up to eight coal-mining groups, each with an output of 100 million tons, and up to ten companies, each with an output of 50 million tons.

At present two companies in the country, Shenhua and China Coal, have an annual output of over 100 million tons.

"China's coal industry should also pay more attention to energy efficiency and environmental protection for sustainable development," Liang said.

By 2010, Chinese coal firms should have cut their energy consumption per ton by 20 percent from the level in 2005, the NDRC said.

Solid waste such as coal gangue and flurry, should be used in 70 percent of electricity production, up from 43 percent in 2005, it said.

China's coal output is expected to reach 2.6 billion tons this year, an increase of 8 percent compared with last year, Liang said. In 2006 the country produced 2.38 billion tons of coal.

This year the country's coal exports will match import totals, both standing at about 50 million tons, he said.