Shanxi aims to deal with 110 million tons of excess coal and find new employment for some 110,000 people made redundant, as part of efforts to tackle overcapacity in the coal industry over the coming five years.

The reforms to the coal industry will be carried out in six provincial coal companies, including Shanxi Coking Coal Group and Datong Coal Mining Group, according to the State-owned Assets Supervision and Administration Commission of Shanxi.

Also, the Shanxi steel industry will reduce production capacity by 820,000 tons in crude iron and 6.55 million tons in crude steel during the 13th Five Year Plan (2016-2020).

Shanxi has taken measures to solve overcapacity among coal companies in recent years faced with the imbalance of supply and demand in the industry.

In 2016, the province closed and reorganized 25 collieries, decreasing coal production by 23.25 million tons and helping more than 20,000 people find new jobs.

Currently, the measures to solve overcapacity seem to have worked. The output of raw coal in businesses whose revenues exceed 20 million yuan ($2.90 million) declined 15.7 percent from January to October. Local coal companies had coal of some 31 million tons in stock at the end of October, a reduction of more than 19 million tons compared with January.

In addition, these enterprises have since seen improved results as September saw profitability again after 26 consecutive months of making losses throughout the provincial coal industry.