According to local reports the plan is aimed at increasing the government's ability to regulate energy supplies by putting it directly in charge of the major coal producers. The aim of the scheme is to try and minimise the amount of small and inefficient mining operations.

The news was released at the National Coal Industry Reform and Development Conference over the weekend.

The Asian Wall Street Journal said the large companies would be formed the merge of smaller firms and are expected to produce more than 50 million tons each of coal annually. Four or five are expected to produce double that amount, it said.

The government has not given any indication of when the mergers will be put into action.

In related news, the Datong Coal Mining Group in the country’s highly productive Shanxi province, has announced a merger which will raise its asset value by a third, South China Morning Post reported.

Datong will merge with Suozhou and Xinzhou coal companies making the overall group with assets totalling 22 billion yuan with coal reserves of about 89 billion tonnes.