China will extend a moratorium on new coal exploration rights for another three years to prevent excess investment and overcapacity but analysts welcome the move which will help the industry's long-term development.
No applications for new permits will be accepted through the end of 2013, the Ministry of Land Resources said on Thursday. This extends the current suspension period which started on March 26, 2009 and due to expire on March 31.
But key coal projects approved by the State Council, China's Cabinet, and projects to be developed by special exploration funds and approved by provincial governments, can still apply for permits.
The latest move may help China's coal industry to develop in a stable manner and conserve resources, Qilu Securities analyst Liu Zhaoliang wrote in a note.
The National Energy Administration last month forecast the supply of coal, which fuels more than 70 percent of China's power stations, may exceed demand this year due to higher domestic output, better transport infrastructure and rising imports.
China is aiming to create huge coal entities and sharply reduce the number of small miners in the industry, long plagued by poor safety record, pollution and inefficiency. Liu said the government will tightly control overall coal output in the next five years by raising the entry threshold for new projects and via consolidation.
