Railway authorities and a coal trading center in Taiyuan, North China's Shanxi province signed a deal on Feb 8 on the transportation of 500,000 tons coal to tackle over capacity in the industry, according to People's Daily.

Under the agreement, the Taiyuan Railway Bureau will transport coal to designated warehouses across the country after coal suppliers and buyers reached agreements through the China (Taiyuan) Coal Trade Center (CCTC).

The first batch of coal was loaded on a freight train en route to Xuzhou city in East China's Jiangsu province on Feb 8.

The coal industry is still faced with over capacity in the mid and long run and is in dire need of industrial restructuring and upgrading, said Qu Jianwu, CCTC's director, at the signing ceremony, adding that the center is committed to limiting company output and make innovation to facilitate more trade.

Zhao Chunlei, head of the Taiyuan Railway Bureau, pledged to enhance cooperation with the center and coal companies, providing better logistics services for them.

Coal is the pillar industry in Shanxi, which has 260 billion metric tons in known coal deposits, about a third of China's total.

Authorities in China launched supply-side reform in 2016 to address over capacity in many traditional industries and ensure a healthier economy.

Shanxi produced 816 million tons coal in 2016, down by 14.4 percent on the previous year.

The signing ceremony of a deal on the transportation of 500,000 tons coal takes place in Taiyuan on Feb 8. [Photo/people.com.cn]