China 's State Council, the cabinet, said Tuesday 8,000 small coal mines with a total output capacity of 200 million metric tons would be closed by the end of the year, in its latest effort to eliminate less efficient production facilities.

The move comes on the heels of China 's benchmark spot coal prices starting to rise after weeks of declines, on the back of a severe drought in the southwest that has reduced hydropower output and several coal mine accidents.

The State Council didn't detail how much small coal mine capacity it aims to close this year, but Chen Liang, a coal analyst with Guangfa Securities Co., estimated it at about 50 million tons of production capacity.

The National Development and Reform Commission, the country's top economic planner, said last month that domestic coal production was expected to rise 3.3% this year to 3.15 billion tons, compared with 12.7% in 2009, due to plans to consolidate small coal mines in several provinces.

The country's benchmark Datong Quality Mix coal with a calorific value of 5,800 kilocalories a kilogram rose CNY5 from two weeks ago to CNY725-CNY735/ton as of today at the key coal shipping port of Qinhuangdao, data from the China Coal Transportation and Distribution Association showed.

Consolidation of the coal sector has been going on for years, but that hasn't succeeded in preventing coal mine accidents.

In the latest accident, more than 150 miners were trapped underground in the Wangjialing mine in China 's northern Shanxi province. Thirty-three miners were still missing as of today.

The State Council also said more than 50 million kilowatts of small coal-fired power generators will be shut down by the end of this year.
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