Shanxi province's Datong Coal Mining Group has announced a merger which will raise its asset value by a third, as officials reinforce moves to consolidate China's fragmented coal industry. Datong Coal will absorb two coal-mining companies in Suozhou and Xinzhou and form a group with assets totalling 22 billion yuan, China News Agency reported, adding the new group would have coal reserves of about 89 billion tonnes. Before the merger, the company had 16.59 billion yuan of assets, annual production capacity of 36 million tonnes and coal reserves of 37.58 billion tonnes, according to its website. An official at Datong Coal confirmed the plan, but could not give the production capacity of the group after the merger, saying the top management was out of town. The new group will be more than 85 per cent held by the Shanxi Provincial Coal Industry Bureau, with the remaining stakes held by Shanxi Province Coal Transportation, Suozhou City Coal Mining, Suozhou City Coal Industry Bureau, Datong City Coal Industry Bureau and Xinzhou City Coal Industry Bureau. Shanxi is the one of the country's top coal-producing regions. It is expected to produce about 400 million tonnes of coal this year, accounting for 25 per cent of the nation's output. News of the merger came on the heels of the National Coal Industry Reform and Development Conference on Saturday, during which the China Coal Industry Association (formerly Ministry of Coal) said the government aimed to create eight to 10 mining groups with yearly production capacities of more than 50 million tonnes. It also hopes to see four to five inter-regional, international and multi-industry groups capable of producing 100 million tonnes or more of coal a year, with a combined market share of at least 60 per cent. The policy aims to shore up competitiveness of the coal industry, which has 28,000 coal mines whose average capacity amounts to only about 50,000 tonnes.