About 2,500 coal mines will be shut down and 1,600 restructured within the next two years. They each have an annual production capacity of less than 300,000 tons.

In a notice posted on the State Administration of Coal Mine Safety's website on Friday, its director, Zhao Tiechui, said the number of such mines will be reduced to 10,000 from the present 14,000 by 2010.

The number of mines to be closed in each coal-rich provinces has been circulated to local governments, he said.

The administration wants to encourage large mining firms to merge with smaller ones to boost work safety, he said.

The notice comes on the heels of another mine blast on Thursday in Shizuishan city, Ningxia Hui autonomous region, in which 16 miners were killed and 46 injured.

Police have held two men from the Guangdong Hongda Blasting Co Ltd for questioning.

The country had closed down more than 18,000 small coal mines by the end of last year. They had a total annual production capacity of 250 million tons.

More than 8,800 mines have also been merged into 3,700, increasing the annual production of each from 32,000 tons in 2005 to 60,000 tons last year.

The mergers have also helped reduce the industry's casualty figures.

A total of 2,900 people died in accidents occurring in small mines last year, about 15.5 percent down from that of 2006.

Experts said that the current clampdown on small mines will not affect market supply. Instead, it will help stabilize it, as the price of coal has seen a drop on the market.

"Shutting down the small mines at this time will help ease the problem of excessive productivity in the industry," Chen Liang, a senior analyst with Ping An Securities, told the Xinhua News Agency.

The new campaign will help keep down the industry's death toll as large mines often pay more attention to work safety, a mine owner surnamed Zhou in Shanxi, said.

For every 1 million tons of coal produced, the death toll at small mines is eight times that of the large State-owned ones, he said.

(China Daily?October 18, 2008)