TAIYUAN, Mar. 5 (China Knowledge) -- Shanxi Province, one of China's major coal production bases, aims to yield 850 million tons of coal this year, 22 million tons less than last year, according to the Shanxi Coal Department.

The target cut is expected to narrow deficit of Chinese coal suppliers, which was resulted by coal price declines in the country commencing the end of last year, said a person familiar with the matter.

In 2011, Shanxi's coal output surged 17.7% year on year to 870 million tons, while its neighbor the Inner Mongolia Autonomous Region produced 979 million tons of coal and targets less than 1 billion-coal output for 2012.

Wu Yongping, head of the Shanxi Coal Department, said the province washed out 260 million tons of backward coal capacities last year.

In 2012, Shanxi expects to invest RMB 160 billion in fixed-asset investment in coal industry, including RMB 105 billion in mine development.

The province had more than 32.1 billion tons in coal reserves as of Dec. 31, 2011, according to Coal Geological Bureau of Shanxi Province.