Chinese coal producers Yankuang, Shandong agree merger

  • : Coal
  • 20/08/17

Chinese state-controlled coal producers Yankuang and Shandong Energy have agreed to merge to form Shandong Energy Group Cooperation with more than 260mn t/yr of joint production capacity.

Shandong province's state-owned assets supervision and administration commission (Sasac) has approved the merger, although it is still subject to anti-trust scrutiny outside China.

Yankuang's listed subsidiary Yanzhou said on 12 July that the companies were working on a merger plan. The merger is part of the Shandong government's strategy of consolidating state-controlled companies with similar businesses so as to raise their efficiency.

Yankuang, which produced 166mn t of coal in 2019, has operations in Shandong and Shaanxi provinces and the Inner Mongolia region. Shandong Energy produced more than 100mn t last year, according to China's national coal association.

Their joint output will make the new company one of China's largest coal producers, accounting for around 7pc of the country's total coal production. Output of China Energy Investment, China's biggest state-controlled coal producer, was 510mn t last year.

The central government is pushing for more energy mergers and listings this year. This could see a further shrinking of the number of centrally-owned firms or "yangqi". Sasac supervises nearly 100 of these and last month called for further corporate restructuring.


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