BEIJING - China proposes to further reshuffle its coal industry by setting higher thresholds for the scale of coal producers and encouraging mergers to form industrial conglomerates, the government said Monday.

The minimum standard for the scale of coal producers will be raised gradually, according to a revised draft of coal industrial policies released by the National Energy Administration, the country's top energy regulator, to solicit public opinions on the proposals.

The draft suggests that the annual output of coal companies in the country's three major coal-producing regions -- Shanxi, Inner Mongolia and northern Shaanxi -- should be no less than 3 million tonnes.

It also says large-sized coal enterprises will be encouraged to form alliances with each other or merge with smaller companies to develop big industrial groups.

The move came as China's coal sector is seeing softening growth and plunging prices due to overcapacity and sluggish demand amid the economic downshift.

The country's coal output rose 4 percent year on year to 3.66 billion tonnes in 2012, with the growth rate 4.7 percentage points weaker than that of the previous year, data from the China National Coal Association showed recently.

Boosted by expectations of faster mergers and acquisitions in future, shares of Chinese coal firms surged on Monday, with Datong Coal Industry Co., Ltd. soaring by the daily limit of 10 percent to 10.26 yuan.

China Shenhua Energy Co., Ltd., the country's largest coal miner, saw its share price rise 1.34 percent to 24.93 yuan on Monday.