According to government sources, Henan province in central China is in the process of consolidating coal mines with a production capacity below 300,000 tons per year, and will only approve new mines with an output capacity of at least 450,000 tons per year. The Henan plan is part of a general policy in China to consolidate its coal industry in order to improve production efficiency.
The plan is modeled after a pilot consolidation program in Shanxi province that was conducted last year. In 2009, Shanxi province reduced the total number of its coal mines to 1,053 from 2,600 after consolidating all coal mines with a production capacity below 300,000 tons per year.
Jianhua Lv, CEO of SinoCoking, said: “The coking coal produced in the Pingdingshan region has particularly high agglutinating value combined with low levels of ash, sulfur and phosphor, which sets our region’s coal resources apart from other coal-producing provinces in China.
“In order to increase our annual coke production and ensure a steady supply of raw material for our coke chemical projects, SinoCoking intends to make acquisitions of local mining operations that will increase the total reserves directly available to the company. The opportunities presented to SinoCoking by these potential acquisitions extend beyond their licensed production capacity or reserves.”
SinoCoking is a supplier of thermal and metallurgical coal and coke to industrial users such as power plants, steel mills, plant and factory operators and manufacturers in China. The company holds mining rights to extract 300,000 tons of coal per year from mines located in the Henan province in central China.
