China's coal-rich Shanxi province is looking to create coal chemical giant by merging coal chemical assets of three state-owned companies – Shanxi Lu'an Mining Group, Yangquan Coal Industry Group and Jincheng Anthracite Mining Group, local sources reported.
The merger, to be led by Lu'an Chemical Group, one subsidiary of Shanxi Lu'an Mining Group officially established on July 13, is in line with the government push for consolidation in coal and other energy sectors.
Coal chemical assets and associated coal mines of the three groups would be merged into Lu'an Chemical Group, reported Nengyuan magazine.
Coal mines of the three companies would be consolidated into Jincheng Anthracite Mining, with future business focusing on coal production and sales, the report said.
Equipment manufacturing assets of the three companies would be merged into Yangquan Coal Industry to specialize in chemical machinery manufacturing.
Presently, it is relatively certain that part of coal chemical projects and associated mines under Lu'an Group and Yangquan Coal Industry Group will be merged into Lu'an Chemical Group, according to one senior official with Jincheng Anthracite Mining Group.
"It is yet to be decided whether Jincheng Anthracite's coal chemical projects and associated mines will be merged," the official said.
Analysts considered the merger plan caters to specialties of the three coal groups.
Yangquan Coal Industry ranked eighth in terms of raw coal output in China in 2018, at 82 million tonnes; Shanxi Lu'an Mining followed with 80.58 million tonnes, showed data from China National Coal Association.
Jincheng Anthracite Mining was the 14th largest producer with output at 64.87 million tonnes in the same year.
(Writing by Jessie Jia Editing by Harry Huo)
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