The China Daily reported the Chinese Government released ambitious plans for the giants to form through a series of takeovers and acquisitions and boast an annual production capacity of 100 million tons of coal each by 2010.

A further eight to 10 smaller coal groups will be formed, each with an annual capacity of 50Mt of produce.

The China Daily said the groups will be accountable for more than half of China's total coal output and will restructure as part of the nation's clean-up bid ahead of the 2008 Olympics.

About 80,000 coal companies mine in China, many producing about 30,000t a year but claiming dozens of lives from poor safety conditions.