(Yicai Global) Aug. 25 -- China's northern province of Hebei, a major steel and coal production region, plans to trim excess capacity by shutting 39 mills across eight cities and 56 mines by this November.
The closures will include several subsidiaries of Hebei Iron and Steel Group Co., China's biggest steelmaker, according to the plan released by the Hebei Provincial Development and Reform Commission.
Under the plan, the province's iron and steel production capacity will fall 18.4 million tons and 16 million tons, respectively, more than the previous targets of 17.26 million tons and 14.22 million tons. Three cities close to Beijing -- Zhangjiakou, Baoding and Langfang -- will stop making steel altogether.
China, the world's biggest producer of iron, steel and coal, is taking measures to reduce excess capacity in the two industries. The central government proposed early in the year to cut capacity of crude steel by 45 million tons and coal by 250 million tons by the end of this year. Targets have been missed largely because of resistance from enterprises, banks and local governments, according to Mr. Li Jin, chief analyst at the China Enterprise Research Institute.
Some 56 coalmines in Hebei province operated by the Ruifeng branch of Jizhong Energy Group Co. will shut to trim overcapacity by 14.58 million tons, according to an announcement issued by the Office of the Hebei Province Leadership Group for Tackling Excess Capacity in the Coal Industry.
In its five-year plan to 2020, the central government aims to trim the nation's total steel output by 150 million tons, which represents an almost 19 percent drop from last year's total.