Manufacturers that fail to comply with the nation's environmental protection standards will be closed down and new entrants into the business will face stricter scrutiny, the Xinhua news agency reported.

"There are louder and louder voices in China over recent years asking for coke export restrictions for the sake of environmental and natural resources protection," said Hua Zugui, chairman of China Coal and Coke Holdings.

China produces more than half the world's coke, a type of coal used to fire steel furnaces, with output last year of 209 million tonnes, according to Xinhua.

Recent figures show clearly why China believes it can now afford to prioritize environmental concerns.

New production facilities are being constructed at a feverish pace so that in just a few years' time, China will have capacity of 330 million tonnes annually, Xinhua said.

However, even with economic growth reaching eight-year highs, China only managed to consume 194 million tonnes in 2004, Xinhua said, noting too that European dependence on coke imports from China is declining.

While the government's decision to restructure the industry may sound the death knell for China's small coke producers, it could be good news for the sector's biggest players.

"It means more market opportunities for large and standardized enterprises and will be good for industrial integration and optimization," said Hua of China Coal and Coke.