CHINA will cut crude steel production capacity by 100-150 million tons and reduce the size of the coal sector to fight a capacity glut, the government said Sunday.

    The State Council made the decisions Friday, according to a statement on the government’s main web portal.

    The State Council reiterated an earlier decision to halt in principle the approval of new coal mines and additional capacity, the statement said. It said the government would reduce coal production capacity “to a large extent.”

    It will also increase policy support including special awards to firms restructuring to eliminate overcapacity and affected workers in both industries.

    The government is pushing to erode overcapacity in the steel industry, as the country aims to shift economic growth towards more consumption rather than heavy investment. The nation’s massive steel sector is said to have surplus capacity of about 300 million tons.

    China’s crude steel output fell 2.3 percent to 803.8 million tons in 2015 from the previous year, government data showed Tuesday, the first drop in more than three decades as the economy of the world’s top producer slows.

    China announced in December it would stop approving new coal mines for three years, but the move was viewed as likely to make barely a dent on the world’s biggest coal industry given its vast existing production capacity.

    Some estimates suggest China’s surplus capacity could be as high as 2 billion tons of coal a year — more than 50 percent of 2015 output — in a country with nearly 11,000 mines.(SD-Agencies)