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.