China now accounts for 47 per cent of global coal consumption but as the country’s demand continues to climb it is now moving to clean up its domestic coal industry.
In a statement released over the weekend, the Chinese government announced it will close at least 2,000 smaller coal mines by 2015, mining.com reports.
Currently China has over 12,000 operating coal mines.
The closures will reportedly target mines with an annual output below 90,000 tonnes, as well as those with lower quality coal or questionable safety records.
The new rules will also tighten approval and development processes, banning the construction of operations with annual capacities below 300,000 tonnes and those with annual capacity less than 900,000 tonnes that produce low quality coal and safety issues.
In 2012 China closed 628 smaller coal mines, enhanced technological efficiencies at 622 mines, and amalgamated 388 mines.
In May Australian Mining reported China's National Energy Administration was drafting policy banning the import and domestic delivery of poor-quality thermal coal.
The regulations which ban coal with a net calorific value of 4540 kilocalories per kilogram or less, would favour Australian coal at the expense of our main coal competitor Indonesia.
But it doesn’t take out coal players like Russia and America who also produce high quality coal at a cheaper price.
Russia also has the added benefit of lower transport costs, being able to utilise rail haulage to move large quantities.
Some analysts said at the time there remains a chance Chinese domestic production could fill the void.