The State Council will use 3-5 years to withdraw 500 million tons of coal production capacity

A few days ago, the State Council issued the "Opinions on the Coal Industry to Resolve Excess Capacity and Achieve Poverty Alleviation and Development", which will take 3-5 years to withdraw 500 million tons of coal production capacity
.

According to the "Opinions", in principle, the approval of new coal mine projects, technical transformation projects and capacity increase projects will be stopped within 3 years, and all new coal mines that need to be reduced and replaced will be implemented; Steadily promote the development of a mixed-ownership economy in state-owned coal enterprises, merge and reorganize small and medium-sized enterprises with large coal enterprises, and strive to achieve a production scale of more than 3 million tons per year for a single coal enterprise; Encourage the development of coal-power integration, and guide large-scale thermal power enterprises to participate in shares with coal enterprises; Strengthen reward and subsidy support, do a good job in employee placement, and increase financial support
.

In addition to resolving the excess capacity of the coal industry, coal freight rates have declined, and coal enterprises may reduce their burden by tens of billions
.
Since February 4, 2016, China Railway Corporation has lowered the coal freight rate by 1 cent per
tonne-kilometer.
According to preliminary estimates, this move will save coal enterprises about 10 billion yuan in logistics costs throughout the year
.

Market analysts believe that coal prices continue to hover at the bottom, and administrative capacity reduction accelerates
.
In the context of large-scale losses and tight funds of coal enterprises, it is expected that administrative capacity reduction will be realized on a larger scale in 2016, and small and medium-sized coal mines will accelerate their withdrawal from the market
.