China stops approving new coal mines

China won't approve any new coal mines before the end of 2019, the State Council said on Friday, as authorities work to slash overcapacity in the industry.

The country will shut down 500 million tonnes of capacity and consolidate another 500 million tonnes into the hands of fewer but more efficient mine operators in the next three to five years, according to a guideline issued by the council.

It said the government will continue to encourage mergers and acquisitions to make companies more competitive, and that the sector will be opened wider to private capital. The state council wants every coal producer's output to be no less than three million tonnes per year.

Massive coal production powered China's economic advance in the past few decades, but shrinking domestic demand amid the economic slowdown has made much of this capacity redundant.

Reducing overcapacity in sectors including coal and steel is a priority on the government's agenda.

In the past five years, China eliminated about 560 million tonnes of coal production capacity and closed 7,250 coal mines.

The country had about 11,000 coal mines at the end of 2015 with a total capacity of 5.7 billion tonnes. Endi