The “Comprehensive Investigation into the Closure and Bankruptcy of China’s Mining and Downstream Industries” reveals that China’s economy continues to slow down, with severe overcapacity in the mining and smelting industries. Business conditions are deteriorating rapidly, and industries such as coal, iron ore, steel, and cement are almost entirely operating at a loss. Most companies have begun cutting production or halting operations altogether, and roughly one-fifth of enterprises are on the verge of bankruptcy. Wages have plummeted significantly, and the number of laid-off workers continues to rise.

According to Tencent Finance, the government announced yesterday that it plans to cut 1.8 million jobs related to coal and steel industries in order to reduce excess capacity. Among them, 1.3 million coal industry workers and 500,000 steel industry workers will face job losses. Yin Weimin, China’s Minister of Human Resources and Social Security, stated: “Although this is a daunting task, we must see it through.”

Next, let’s take a look at some big data on losses and bankruptcies in the coal and steel industries for fiscal year 2015-16.

Coal industry

I. Coal Industry

1. Longmei Group plans to lay off 100,000 employees and encourages workers to start their own businesses and explore the market, with a goal of fully achieving the three-month target of reallocating 100,000 people.

2. Half of Inner Mongolia’s coal mines have suspended operations, leaving over 100,000 people unemployed. The chairman of a certain coal group stated that more than 90% of China’s coal enterprises are now either unprofitable or operating at a loss.

3. By the end of June, Loudi, Hunan Province will close 125 small coal mines.

4. July: Coal prices plummet, causing coal companies to suffer losses, halt operations, and cut salaries by 40%. In 20 provinces and regions, coal companies have lowered employee wages, with most cuts exceeding 30%. Inner Mongolia Huo Coal Group has become the first coal enterprise to undergo restructuring. In the first half of the year, Shanxi Province’s coal industry suffered losses exceeding 4 billion yuan, marking 12 consecutive months of losses.

5. In Lengshuijiang, a key coal-producing county in Hunan, 39 coal mines have been shut down, representing a closure rate of 60%. Among the city’s 16 township-level administrative units, 8 have already phased out the coal industry.

6. Ninety percent of Shandong’s coal enterprises are suffering losses, forcing the coal industry to cut overcapacity. Coal prices have fallen to their lowest level in six years. To prevent massive losses, companies have resorted to wage cuts, with average pay reductions reaching as high as 50%. The coal industry in Inner Mongolia has plunged into a crisis, and many coal workers have left the mines to seek alternative livelihoods.

7. Shaanxi has closed the second batch of 18 coal mines after a 15-year closure period. These mines are located in seven cities: Yulin, Yan'an, Tongchuan, Weinan, Baoji, Xianyang, and Ankang. Specifically, Yulin has 5 mines, Yan'an has 2, Tongchuan has 3, Weinan has 4, Xianyang has 1, Baoji has 1, and Ankang has 2.

8. All coal mines in Anhui with a capacity of 300,000 tons or less have been shut down, and small coal mines have completely exited the historical stage.

II. Steel Industry

1. The Slovak steel plant has reduced costs by laying off employees and, by offering financial compensation, is providing each employee with an average payout of 19,000 euros to encourage voluntary departures and thereby lower its expenses.

2. March: Steel mills in the Linyi area of Shandong Province have been shut down, affecting a total of 57 enterprises involved in ferroalloys, coke production, chemical industries, cement, and other sectors, leaving nearly 60,000 people unemployed.

March and April: Pancheng Steel laid off tens of thousands of workers, leaving 16,000 employees facing layoffs and job reallocation. Overnight, the lives of these people—centered around the steel plant—were completely upended.

4. August: 26 listed steel companies posted a net loss of 10.7 billion yuan in the first half of the year.

5. September: Haixin Steel filed for bankruptcy reorganization and officially entered legal proceedings. Hubei Province phased out outdated production capacity, and the once iconic Ezhou landmark—the E’gang 544 blast furnace—has now permanently disappeared from public view.

6. October: Fenghu shut down 13 rolling mills and began exploring new development directions.

7. The steel production line of Hangang Group has been shut down.

8. The wave of production cuts at Tangshan’s steel companies is gaining momentum. Ruifeng has halted one 600-cubic-meter blast furnace, Rongxin has shut down a 450-cubic-meter blast furnace, Xinda has already suspended two blast furnaces, Jin’an has stopped one 450-cubic-meter furnace, Jinxi has halted one 550-cubic-meter furnace, Donghai has stopped one 450-cubic-meter furnace, Tangyin has halted one 450-cubic-meter furnace, Xinglong and Antai have both ceased operations entirely, Tianzhu has halted two 580-cubic-meter furnaces, while Chenglian, Yuefeng, Qingquan, and Fufeng are all in a state of prolonged production shutdown.

Abroad, the cost of iron ore is less than 50 U.S. dollars per ton, whereas the average cost of iron ore in China is nearly 90 U.S. dollars per ton, leaving the entire industry facing losses. Iron ore production in provinces such as Hebei and Liaoning has already begun to decline sharply, making it increasingly difficult for mines to sustain operations. In the next two years, a quarter of China’s domestic mines will shut down.