A State Council meeting chaired by Premier Wen Jiabao pledged to develop and utilize the nation's coal resources in a sustainable and efficient way to ensure supply stability.

The central government will encourage coal mines to develop clean coal technology, while also working to increase coal output by updating the coal production facilities and transforming and expanding major mines.

Efforts will also be made to reform the pricing of coal and electricity and make the power price fluctuate with that of coal.

Comprehensive co-ordination of rail, road and marine transport must be intensified to expand coal transport capacity.

Participants at the meeting also urged local governments to close illegal small mines scattered across the country, while also laying stress on production safety.

More than 80 per cent of the nation's power plants use coal to generate electricity, with coal shortages resulting in power shortfalls in many provinces in past months.

More than 40,000 enterprises in Yiwu of East China's Zhejiang Province have stopped using electricity provided by the national power grid since July 24 to ensure local residents have sufficient supplies, City Express reported.

Some manufacturers have suspended production, while others use diesel generators to obtain electricity, the report said.

"Many factories hesitate to accept orders because of the severe power shortage. The direct loss from the suspension of production in my factory amounts to more than 3 million yuan (US$360,000) in past ten days," the report quoted a leading local business person as saying.

Since the beginning of last month, 24 provinces have imposed restrictions on power supplies.

The power shortage in the third quarter was estimated to reach over 30 million kilowatts and East China's power grid will lack more than 18 million kilowatts, experts say.

China's national railway authority has urged local railway departments to make every effort to ensure coal transport in order to help ease the nation's power shortage.

Ministry of Railways statistics indicate that, among a total of 310,000 carriages of the nation's railway departments, 220,000 have been used to transport coal.

A total of 400 million tons of coal were transported via rail from January to May this year, a year-on-year increase of 46.82 million tons.

The nation's railway system had transported more than 62 million tons of coal in 20 days since late July, among which are 35 million tons for the use of generating electricity.

The Ministry of Railways also urged local cargo transport departments last week to stabilize freight charges to ensure fuel transport.

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