China's job-saving coal fix may mean trouble for overseas miners

Shanghai

CHINA'S biggest coal region has a fix for the country's glut that may send shivers through miners from the United States' Appalachian Mountains to Australia's Hunter Basin.

The Chinese government wants to shut roughly 9 per cent of its production capacity to shrink its industrial sector and clean its polluted skies. That means dismissing 1.3 million coal workers, risking social unrest that Beijing wants to avoid.

An alternative touted by the northern province of Shanxi, which produces more coal than any country other than China, is to keep mines running and ship the excess overseas.

As its economy slows and shifts from manufacturing, China is confronting the aftermath of decades of expansion that left it with excess industrial capacity. It has responded by raising exports, causing havoc for global steel producers, aluminium smelters and oil refiners. If its biggest …