Shanxi province announced plans to reduce its coal overcapacity by 20 million tons by the end of this year, and the amount is expected to reach 100 million tons by 2020.

Coal production will be limited to 1 billion tons and coal mines will be reduced from 1,078 to around 900.

Data from the Coal Industry Department of Shanxi show that the province had closed 16 coal mines by the end of June, which should lead to a reduction of 12.3 million tons of coal capacity per year.

The effort made to cut overcapacity and carry out coal supply-side structural reform has had some initial success, said Hu Wansheng, deputy director of the province's Coal Industry Department.

In the first half of this year, the province reduced coal output by 68.21 million tons, a decrease of 15 percent over last year achieved reduction.

A package of reform measures was carried out from July to regulate the business and competitive nature of the coal industry.

Hu also pointed out that technological innovation on non-pollution mining and cleaning, low-carbon, and efficient use of coal is the only way forward for the coal industry.

Shanxi province is one of the major coal producers in China, and the coal industry is the pillar of its economy. Local government has controlled the growth of coal production in recent years to lessen reliance on coal resources.