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Shanxi, China's largest coal-producing province, plans to put the brakes on the further expansion of coal mining in the next five years. The move is part of tough measures to clean up the sector's record of contributing to environmental damage, the wastage of resources and mine disasters.

Shanxi Governor Yu Youjun made the pledge at a press conference Sunday night on the sidelines of the current legislative session in Beijing. Yu added that the provincial government aims to upgrade the region into a "new energy and resource base."

"We cannot continue the rough way of development any more and must limit coal production strictly with the guidance of the scientific concept of development," Yu said.

As China aims to build a more efficient and environmentally-friendly economy, efficiency in the coal industry is now a growing concern. Official statistics showed it takes 2.45 tons of water on average in China to produce a ton of coal. The coal production rate in many small mines is as low as 25 per cent, and some byproducts, such as the coal-bed methane, is often wasted.

North China's Shanxi Province produced 600 million tons of coal last year, accounting for 26 per cent of China's coal output. Yu said Shanxi can guarantee an annual output of 700 million tons in the next five years, about a quarter of the country's predicted coal demand, by increasing the coal recovery rate the amount of coal that can be extracted from the coal-bed without more mining. It is currently shutting down the mines with an annual output below 90,000 tons and pushing those producing less than 200,000 tons per year to introduce more advanced, environmentally-friendly technologies.

"We will also introduce strategic partners to establish large-scale coal mine groups with highly competitive and advanced technologies," he said.

What's more, the local government will promote merger and acquisitions to reduce the number of mines to 2,500 by 2010 and ensure 80 per cent of the province's coal output comes from mines with an annual capacity above 1 million tons, said Yu.

Shanxi has shut down 4,876 illegal mines since last September and punished about 1,200 people, including more than 60 local officials who turned a blind eye to the illegal operations of the mines they invested in or harboured.

Coal accounted for 66 per cent in China's energy supply last year and is going to remain the top priority in the long-term energy strategy of China, which is wary of the heavy reliance on imported oil. China is now the world's second largest oil importer after the United States.

Yu said it is a priority in Shanxi's 11th Five-Year?Guidelines (2006-10) to develop the more value-added coal chemical industries such as power-generating coke, coke oven gas and alcohol-ether fuel, in addition to fostering equipment manufacturing, the development of new resources and tourism.

About half of the coke supply in the world market is from Shanxi.

The province is not only famous for black coal. It also boasts many brilliant cultural legacies such as the Yungang Grottoes in Datong and well-preserved grand courtyards, formerly the homes of the country's richest bankers in ancient times.

Yu, previously the mayor of Shenzhen in South China's Guangdong Province, will lead a delegation to Hong Kong in early July to promote local business projects to overseas investors.

(China Daily March 7, 2006)