Chinese state-run coal miners Yankuang Group Co. Ltd. and Shandong Energy Group Co. Ltd. agreed to merge.

Yankuang Group, the controlling shareholder of Yanzhou Coal Mining Co. Ltd., first announced plans to restructure with Shandong Energy in mid-July.

Yanzhou Coal said Aug. 14 that the agreement was approved by Yankuang Group shareholders Shandong Provincial State-owned Assets Supervision and Administration Commission, Shandong Guohui Investment Co. Ltd. and Shandong Provincial Council for Social Security Fund.

Yankuang Group was renamed Shandong Energy Co. Ltd., according to the Yanzhou Coal statement, which noted that the merger is subject to antitrust scrutiny and other approvals.

The new entity is expected to become one of the biggest coal producers in China, with annual production around 260 million tonnes, Argus Media reported Aug. 17. The combined production figure would represent 7% of the country's total coal output, according to the report.

The deal is in line with the provincial government's plan to consolidate state-controlled companies with similar businesses and with a push from China's central government for more energy mergers and listings, the report said.