The first group of 19 merged collieries in Shanxi Province have got business permits recently from authorities, a significant progress of the region's largest-ever restructuring campaign in an effort to improve work safety conditions and production capacity of the industry.

About 97.9 percent of all the 2,598 involved coal mines have signed merging deals and the issuance of new business licenses are in full swing, the provincial administration of land and resources and coal industry told Xinhua on Sunday.

Shanxi, China's leading coal production base that has suffered frequent fatal mining accidents, is expected to see the eradication of all small mines with an annual production capacity of below 300,000 tonnes by the end of the year -- the scheduled deadline.

By cutting off about 60 percent of its existing coal mines, the province will finally have 1,053 collieries, 20 percent are state-owned firms, 30 percent are privately-run companies and 50 percent with mixed ownerships.

All the merged coal mines must adopt mechanized mining, which will greatly raise output and reduce workplace fatalities.

According to the plan, Shanxi is expected to have four coal mine groups producing more than 100 million tonnes of coal a year, three groups with an annual output of more than 50 million tonnes and 83 companies whose production capacity range between about 3 million tonnes a year to more than 10 million tonnes, said Wang Shouzhen, director with the provincial administration of coal industry.

Xue Deping's Xiaoyi Dewei Coal Mine was merged by the state-owned Shanxi Coking Coal Group Co. Ltd. in July and he now holds 49 percent of the shares of the new company, which officially started operation on October 11.

"I'm now standing on a development highland after the cooperation with a giant of the industry," said Xue.

The merge could help private companies to survive as it introduces advanced production technologies and management methods, he said.

Four professional mining departments, six technological and logistics sections were established and many outdated mining facilities had been replaced. "I've never dreamed about such production conditions before," said Xue.

The government of Shanxi initiated the campaign late last year with the approval of state-level authorities amid the global economic downturn. The move has demonstrated positive effects as the province registered 159 deaths in 45 coal mine accidents between January and September this year, or 28 percent and 62 percent less than the same period of last year respectively, according to Miao Huanli, an official with the administration.

The move also led to more coal output and revenue. Statistics from the administration showed that coal mines produced 430 million tonnes of coal in the first three quarters of the year, turning in 45.47 billion yuan (US$6.66 billion) in revenue, up 6.4 percent over that in the same period last year.

(Xinhua News Agency October 26, 2009)