M&As to gather pace in China coal sector

2017-04-13 17:40:00 Policy,  Company sxcoal.com

Mergers and restructuring among China's coal sector are accelerating, with about ten enterprises producing more than 100 million tonnes of coal annually projected to be established by 2020, Economic Information Daily reported on April 13.


Related departments have been asked to issue guidance on promoting the sector's mergers, restructuring, transition and upgrade. Small coal mines based in different regions will implement mergers and restructuring within two years, meanwhile, about ten big companies will be set up by 2020, the newspaper said.


The government also encouraged enterprises to strengthen trans-regional cooperation to cut overcapacity through stock swap.


China will reduce coal production by at least 150 million tonnes this year, Premier Li Keqiang said.


The government pledged to make more use of market- and law-based methods to address the problems of "zombie enterprises" and encourage enterprise mergers, restructuring and bankruptcy liquidations.


Last year, six enterprises' production exceeded 100 million tonnes, while in 2015, it was eight, Zhang Hong, deputy secretary-general of China National Coal Association, told the newspaper.


The State-owned Assets Supervision and Administration Commission earlier said that the number of centrally administered State-owned enterprises (SOEs) will be reduced to no more than 100, which now stands at 102.


The government also promised measures such as introducing a mixed ownership system and more efforts to make SOEs leaner and healthier, especially in the steel, coal and power sectors.


There will be about 3,000 coal enterprises in 2020, mostly large companies, running about 6,000 collieries nationwide, with large-capacity coal mines the majority, according to the coal industry 2016-2020 development plan.

(Writing by Katherine Wu   Editing by Harry Huo)
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