Yanzhou Coal Mining Co. Ltd. said Oct. 10 that it has proposed to close its Beisu coal mine in China's Shandong province and cut 1 million tonnes from the country's excess coal capacity, in line with the government's efforts to curb overcapacity in certain sectors.
The company's move to shutter the mine was also driven by the slowing demand for Beisu's high-sulfur coal product and the immense exploration expenses at the project, given its complicated coal occurrence.
Yanzhou has received government approval for the mine's closure and expects to complete the shutdown by the end of March 2017, though the final completion date remains subject to a number of conditions including the approval for the shutdown plan.
Meanwhile, Beisu's staff will be offered internal reassignments or voluntary employment termination packages.
In accordance with the Chinese government's circulars on restructuring sectors that suffer overcapacity, Yanzhou's controlling shareholder, Yankuang Group Co. Ltd., will receive special rewards and subsidies amounting to about 149.1 million Chinese yuan for the mine's closure.
Beisu started coal production in 1976, with recoverable reserves of 11.55 million tonnes as of Dec. 31, 2015.
As of Oct. 10, US$1 was equivalent to 6.71 Chinese yuan.