China's top economic planner has approved a coal mine project in northern China's Inner Mongolia autonomous region to replace outdated capacity, with a total investment of 4.2 billion yuan ($634 million).

Production capacity at the open-pit mine is planned at 15 million metric tons per year, according to the National Development and Reform Commission (NDRC).

The project is expected to optimize industrial structure and ensure energy supply in the region, according to the NDRC.

Cutting overcapacity in the bloated coal industry remains a major task for policymakers.

The government has pledged that it will strictly control new capacity in the coal industry and won't approve any new coal mines before 2019 unless a certain amount of outdated capacity is shut down as required.

The NDRC stressed that the new project had to strictly follow the capacity plans, and could not seek expansion within five years of the start of production.

Last year, China eliminated coal production capacity by over 290 million tonnes and plans to slash coal production capacity by at least 150 million tonnes this year.

(Source: Xinhua)