In 2017, a coal mine in the Shanxi village of Wangtaipu closed, depleted after six decades. It had once been among the province’s most important mines, producing up to 260 million tonnes of coal a year. For over half a century, it provided livelihoods for locals and supported ancillary jobs in logistics and railways. The village flourished.
The closure of the mine, though, did not lead to a slump. Mine managers have been working with private investors to develop the production of “new materials”, such as prefabricated buildings and insulation, and leasing out former mine offices and workshops. The mine’s railway spur and two empty plots of land allowed for a containerised depot to be built. Here, pulverised coal needed for industrial processes at nearby chemical and cement plants can be brought in from elsewhere in the province and beyond. This diverse approach has become a model for mining areas seeking new ways to grow.
By 2030, China is expected to have 15,000 closed mines like that at Wangtaipu. Its coal-producing regions all face the challenge of promoting the orderly coal phaseout while maintaining energy security and achieving sustainable development.
Our visits to Shanxi coal mining sites led us to think of the phase-out as a systematic restructuring. If mines are simply closed, valuable assets are lost and employment, development and ecological restoration issues only become more complex. The work done in Shanxi, China’s biggest coal-mining province, provides possible but still-evolving solutions.
The importance of Shanxi
Shanxi is extremely coal-rich. It produced 1.3 billion tonnes of coal in 2025, or about 15% of the global total. The coal mining and washing industry employed around 910,000 people as of 2024, according to the Shanxi Statistical Yearbook 2025. All this has made the province one of the most challenging areas in the world to transition away from the fuel.
Ten years ago, coal oversupply caused a price crash, prompting the Central Economic Work Conference to start a process of “supply-side structural reform”. By 2025, reducing and consolidating capacity had brought Shanxi’s coal mine numbers to 887 – down from 2,598 in 2005, but still more than any other Chinese province.
The task was about more than just cutting numbers. National and provincial policies had, since 2016, encouraged mines to bring unused space and idle assets back into use. The aim was to promote a transition to other energy services such as solar power, wind power, energy storage and heat recovery.
The work was given renewed urgency in 2020 when China set its targets to peak national carbon emissions before 2030 and become carbon neutral before 2060. Shanxi would have to deal with the structural changes arising from reducing output and demand. Finding new pillar industries became the most pressing task.
However, the routes for coal-mining areas to take during this phase out are still being explored. It’s not just a case of closing the mines. All aspects of regional development need to be considered. It requires a process of systematic restructuring covering employment and resettlement, land use, disposal of assets, and industrial transitions.
The challenge of re-employment
Finding roles for laid-off workers has always been key to the coal phase-out. According to research at our organisation Shanxi Coshare, the province’s coal industry supports jobs, directly and indirectly, for 3 million people. Traditionally, laid-off workers have been found alternative employment within the same organisation. However, as output appears to have peaked in 2023 and production gets smarter, fewer new jobs are being created, meaning less scope for internal transfers.
“I don’t know what kind of job I’ll end up doing in the future,” said one worker, aged 40. Similar situations are not rare. Our research found those in the mining industry tend to be older and less educated, making it harder to change career. In the mining workforce, 58% are aged over 40, 90% have at most a junior college level of education, and skill sets tend to be limited.
Although a new industry has been set up in Wangtaipu, the laid-off workers are finding acquiring the skills needed for containerised logistics a challenge. They need more training by employers and government to move into the new jobs smoothly.
Ecological restoration and economic value
To date, Shanxi has 6,000 abandoned mine shafts. In some cases, a lack of documentation means it is unclear who is responsible for older and abandoned mines, so the considerable financial burden of ecological restoration will have to be borne by government.
Ecological problems in mining areas can be hard to detect and long-lasting. If a mine is closed, there’s no income to cover the huge expense of tackling them.
Since 2006, the Ministry of Finance has required mining licence holders to keep a separate account for money which would cover those costs once the mine closed. In 2017, the system was changed, with the government given closer oversight of the funds. But some long-closed mines never made adequate contributions and incoming companies have had to cover costs, which results in delays to restoration.
More importantly, while mining firms have a duty to restore land damaged by their activities, they don’t have ongoing development rights. This means they tend to do the minimum required for compliance, rather than turn the land into an asset with long-term ecological or economic value.
The costs of reuse and debt issues
Coal mining is a classic example of an asset-intensive industry, which makes dealing with the assets after phase-out more complex.
Ongoing use of surface facilities and equipment is very difficult. According to our site visits and reading of reports, some of a closed mine’s portable equipment can be transferred within the same company, but most is too old or worn out to be of any use. Surface infrastructure – workshops, railway spurs and other facilities – tend to be specialised. Repurposing them is expensive and without viable use cases it is likely they will lie idle.
There are potential uses for the actual mines themselves, but the technical and financial challenges are significant. A closed mine leaves lots of empty space underground, which could be repurposed for energy storage or data centre facilities. But certain questions need to be answered first: How much space is there? Are the geological conditions suitable? Are the risks of long-term operation acceptable?
If all is well, an abandoned mine can be safely converted into an operable asset. But the assessment and conversion process is complex, requiring significant up-front spending. This limits widespread development of former mines.
Debt is another big issue. During the supply-side reforms of 2015 onwards, many of Shanxi’s small and medium-sized mines were folded into provincial state-owned mining companies before closure. Their debts weren’t written off, but transferred to the provincial company. And the usual routes to handling bad debts – bankruptcy, debt-for-shares swaps and debt restructuring – are rarely used in the coal sector. The long and difficult process of managing the debt is a key factor hampering the orderly phase-out of coal.
Structural tensions and industrial transition
For a long time, industry in Shanxi has been dominated by coal, with other industries lagging in terms of technology, personnel and ancillary support. These new industries have not grown enough to make up for the shrinking of coal.
The current system tends to see state-owned coal firms pivoting to other energy sectors such as renewables, or to other parts of the coal sector, such as equipment manufacturing and coal-to-chemical production. Limitations prevent them from moving into other fields. For example, ideas about using mining land for data centres or agriculture have not been realised.
We also found that the nature of the coal industry means these firms face restrictions when applying for support in the form of low-carbon subsidies, green loans and transition finance. The authorities and financial institutions concerned put coal firms under more scrutiny and subject them to higher standards. Add in the high cost of financing transition projects and the difficulty in obtaining subsidies – this all further hampers the diverse development of former mining areas.
New solutions
To improve the situation, China’s local governments need to get past the idea of simply closing mines. As in Shanxi, each has different circumstances and presents different challenges, which need to be categorised and managed appropriately. When a coordinated and locally appropriate approach is taken, the burdens of coal phase-out can become resources for revitalisation, leading to an orderly process and regional prosperity. Wangtaipu is an example of Shanxi’s attempts in this direction.
The province has others too. Jinhuagong mine, located in the city of Datong, is now a “mining park”, with its industrial heritage tourist attractions staffed by former miners. Yungang mine is home to a compressed air energy storage facility. Subsidence zones around Datong are being used for solar+forestry projects.
In Jincheng, closed shafts at Fenghuang mine were turned into a mining training centre, while Gushuyuan mine became an industrial tourism attraction, in partnership with a Beijing company.
Other, harder to quantify factors – social cohesion, local identities, confidence in the future, and social stability and confidence – will also determine whether or not policies are successful. One way to ensure fairness during the transition is to honour mining heritage and the contribution coal workers have made to the nation.
Whether in Shanxi or elsewhere, the key to mining transitions is to respect the people who built these places. As one soon-to-retire miner said: “We might be about to retire, but I hope this place remembers us and what we gave.”
