China is now the world’s largest coal producer and consumer. “Rich in coal but lack of petroleum and natural gas” is the natural characteristic of the Chinese energy resources. In the past 50 years, coal is the major energy resource in China which accounts for over 70% of the total volume of the non- reusable energy. This situation will not change for a long period of time.

In recent years, the output of coal in China keeps a steady increase. The production volume of coa1 reached a historical record level of 1.95billion tons in 2004. The entire situation of the operation of coal economics is bright, the price of coal is steady with upward trend and the whole industry has experienced profits and gains. The level of productivity has enhanced with 75 % of the large and medium state-own mines having their own mining mechanization, the production efficiency is 3.77 tons per worker. Workplace safety improved gradually, the death rate had dropped 4.2% while the production volume had increased 12.7% in 2004 compared with 2003.

In recent years, the coal industry insists on keeping development as their principle under the support of a series of government’s policies. At the same time, the reorganization of the industry structure has made certain improvements.

60,000 small mines with problems of resources wastage, technology backward, severe pollution and lack of a safety production were shut down. Some state-own mines with severe resources and financial problem went bankrupt as well. Most large and medium state-own enterprises now begin to establish modern corporate systems. 66 state-own enterprises have changed to incorporated enterprises, which accounted for 79% of the state-own enterprises. 15 enterprises are listed in stock market after the approval of changing systems. A number of large, trans-regional and cross-industry mine groups have been brought up and developed, which can speed up the construction of the modernized mines. 164 mines with high efficiency and productivity have been built which accounts for 28% of the total national coal output. The production of raw coal is 11.6tons per labor, the average profit of a single pit is 73.69 millions yuan. Some mines have reached the international standard. The industry also insists on comprehensive exploration. Furthermore, developing the newly boosted sector of coalbed methane, well organizing the comprehensive use of fine coal and refuse, protecting the environment in mine area, and strengthening the clean coal technology and the technology of coal gasification and liquefaction are the current goals of the national mining industry.