China has reduced its coal production capacity by 150 million tonnes in the first eight months of the year, representing 60 percent of its 2016 target for capacity cuts, state media said on Friday citing the state planner.
The rate is nearly 1.5 times progress in the first seven months of 38 percent, Lu Junling, a senior official with the National Development and Reform Commission (NDRC), was quoted as saying at an industry meeting on Thursday to discuss market stabilisation measures.
The country is the world's top coal consumer but demand has been on the wane as economic growth slows and as the country shifts away from fossil fuels as part of a drive to curb pollution.
China's coal producers have lobbied the government to approve a plan to increase output that could add 8-9 million tonnes per month of new supply from some 74 mines that produce high-quality clean coal.
That was discussed at the meeting on Thursday and included a proposal that would allow producers to raise output if domestic prices hit certain levels, state-media Xinhua said.
According to the proposal, selected mines would be able to increase average daily production by 200,000 tonnes if the benchmark price, the Bohai-rim steam-coal price index (BSPI), trades above 460 yuan per tonne for two weeks.
That would rise to 300,000 tonnes of coal a day if prices go up to 480 yuan per tonne, and would increase to 500,000 tonnes if prices hit 500 yuan for two weeks, Xinhua said.
The BSPI is currently at 515 yuan, according to industry website CQCOAL.com.
Any increases would be pulled if prices fall below trigger levels respectively at 460 yuan, 470 yuan and 490 yuan also for as long as two weeks.
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