Shanxi, China's leading coal-producing province, has awarded nearly 1 billion yuan to six state-owned coal producers for cutting production.
The six pledged to slash coal production capacity by a combined 10.6 million tonnes per year, with Datong Coal Mine Group promising the biggest cut of 3 million tonnes per year. The group received 312 million yuan, according to the Shanxi provincial department of finance.
The central Henan province plans to award 2.18 billion yuan to coal and steel producers this year for cutting production, with three state-owned coal producers already receiving a portion of the funds.
The funds will compensate workers whose employment has been affected due to cuts in overcapacity, said the Henan provincial department of finance.
The country has adopted a combination of measures to make cutting overcapacity an economic priority.
Last week, a furnace capable of producing 1.33 million tonnes of iron every year, or enough iron to build an Eiffel Tower in three days,
was demolished in Baogang Group in north China's Inner Mongolia Autonomous Region.
The furnace, which was built in 1959, is the largest to be demolished since China initiated supply-side reform to tackle industrial overcapacity last year.
The country has vowed to cut steel capacity by 100 to 150 million tonnes by 2020, including 45 million tonnes in 2016. This year's target to slash coal capacity is 250 million tonnes.
Time is limited, as China's top economic planner had ordered local governments to speed up measures to cut excess coal capacity.
"Local governments should strive to fulfill their targets by the end of November, while central and provincial state-owned coal producers should complete them in early November," Lian Weiliang, deputy head of the National Development and Reform Commission, said in August when addressing an internal meeting.