INNER MONGOLIA, China’s biggest coal producing region, cut its output of the commodity by just over 10 percent in the first seven months of the year as part of its efforts to close 3.3 million tons of capacity this year.

    By the end of August, the region had shut seven coal mines, Wang Binjun, director of Inner Mongolia’s Economic and Information Commission, was cited as saying by local media. The region plans to close a total of 65 mines by 2020 to curb crippling overcapacity in the sector.

    Authorities have allotted output cuts to 10 companies, who will be responsible for implementing the cuts by the end of October to help the region meet its capacity reduction target for the year, an official document released by the Coal Industrial Bureau (CIB) of Inner Mongolia said last week.

    Coal companies in the region have posted a combined loss of 4 billion yuan (US$600.41 million) in the first half, up 17 percent year on year, due to the supply glut caused by China’s economic slowdown, according to the CIB.

    Inner Mongolia’s first-half production dropped 10.4 percent, said the CIB, bringing down the raw coal production to 407 million tons, or 25 percent of the nation’s total.

    Even so, China has been struggling to meet its November deadline to complete this year’s capacity reduction target of 250 million tons with provinces worrying about hurting jobs.

    Apart from coal, China is also struggling with overcapacity in its steel sector. Inner Mongolia plans to cut its output of the alloy by 2.91 million tons this year, Wang added.(SD-Agencies)