2.2.2.1 Production

At the end of 1997 there were 1994 coal mining enterprises, each with an annual production capacity of 30,000 tons and more in China. Their total production capacity was 741 million tons per year and total coal output was 755 million tons. Besides, about 58,000 small coal mines of town and township owned, collective and self-employed mines produce 570 million tons of coal per year. With the output of small mines taken as their production capacity total production capacity would be about 1.311 billion tons and China's total coal output is 1.325 billion tons with the total industrial output value of RMB 83.539 billion yuan in terms of fixed price of 1990 and RMB 157.735 billion yuan at the current price.   

China's coal mines are classified mainly into three groups according to their difference in  ownership,affiliation and way of product distribution:

(1) State-owned key coal mines(or coal mines with their products under state unified  distribution)

They are mines of public ownership invested and run totally by the State, and administered directly or mainly by the state department in charge of the coal industry , or jointly managed by both the central and local government organizations. At the end of 1997, there were 111 state-owned coal mines, of which 90 mines were medium-sized and larger(Fig. 2.2.2). The overwhelming majority of coal produced by the State-owned mines is distributed by the State in a unified way to all parts of China for use in metallurgical, electric power, chemical and building materials industries, communication and transportation sector and large and medium cities in the country. Meanwhile, redistribution is made to cover the shortage in some provinces(autonomous regions and municipalities)where coal resources are insufficient. Only a very small part of the coal is sold by the mines themselves in the market. In recent year , with the development of market economy in China, the proportion of coal sales through the mines' own channels has been progressively enlarged. The state-owned mines produce coal in a large scale with modernized equipment and represent the development level of China's coal industry, so they are the major source for coal supply to guarantee the sustainable, stable and sound development of the national economy.

(2) Local state-owned coal mines( local state-run coal mines )

They are mines of public ownership invested and run by provinces(autonomous regions and municipalities), prefectures, cities and counties or by some other governmental departments. Up to the end of 1997, there were 1883 such coal mines in China. Most of them were directly administered or predominatingly administered by local governmental departments at different levels , and a few were administered jointly by the central and local governments; while those mines set up by some other governmental departments were managed by those departments themselves. The coal produced from the local State-owned mines is under unified distribution mainly within their province for use in the local industries and in medium and small cities. Some provinces that have a surplus of coal may offer coal to the state for nationwide unified distribution or to support other provinces(autonomous regions and municipalities)where coal is in short supply. Those governmental departments that initiate coal mines may use or distribute their coal by themselves. Most of the local State-owned coal mines are constructed in the areas designated by the state coal administration, where geological and mining conditions are too poor to set up large state-owned coal mines, thus improving to a certain degree, the distribution pattern of China's coal industry. Sometimes State-owned key coal mines and local State-owned coal mines are generally called State-owned coal mines.

(3) Town and township collective coal mines

They are refer to small mines set up with  funds raised or invested by individuals. By the end of 1997, there were about 58,000 mines run by towns and townships as well as individuals. Among them 22,856 were of collective ownership. The coal produced from such mines are managed and sold by themselves, mostly to local villages and township enterprises or for civil use and only a minor amount is transported outside. Without regular  geological information and mine design, such mines exploit sporadic resources in tectonically complicated areas and the leftover reserves of big mines and therefore have very little successibility. In those mines, backward production methods are used, the safety conditions are poor and the recovery rate is very low. However, they have been developing rapidly because of small investment and operation scale, flexible production and business operations and particularly considerable economic return.

Sometimes local State-owned coal mines and town and township collective coal mines are generally called local mines.   

Besides, with the deepening of economic restructuring in China, trans-regional, inter-trade and cross-ownership large coal enterprise groups with strong competitiveness and medium and small-sized coal enterprises implementing share holding system and other forms are emerging.   

Since the founding of the new China, coal mines of various types have developed rapidly and the coal output kept increasing. In the year 1949 the national coal output was only 32.43 million tons but it reached 1.325 billion tons in 1997, 40 time increased with an average of 27 million tons per year. So, China's coal industry has met the requirements of industrial and agricultural development and guaranteed the demands for coal by the development of national economy and society.

In the composition of the national coal output before the readjustment period from 1963~1965,  except in the Second Five-Year Plan period, the output of state owned key coal mines kept a proportion of over 70% and that of local State-owned mines kept the proportion of about 25%; while the output of collectively-owned mines made up only about 4%. After the readjustment period, the output proportion of collectively-owned coal mines grew rapidly while that of State -owned key coal mines decreased progressively. In the Fifth Five-Year Plan period, local State-owned mines also declined in terms of the proportion of output step by step. Since China's reform and opening up, the central government has put into practice

Fig. 2.2.2  Map of distribution of China's key State-owned coal mines
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