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China is taking another step to consolidate its coal industry with plans to merge three firms that could form the country’s third-biggest miner.

Shanxi province, the No. 2 coal producing region, is preparing to restructure three of its state-owned firms, according to people familiar with the matter.

The merger would underscore China’s efforts to consolidate its coal industry to concentrate production in the hands of larger, more efficient firms to streamline the business. Despite global efforts to stem use of the most polluting fuel, its abundance and low cost in China have put it on course to dominate its power sector for years to come.

In the latest possible restructuring, Lu’An Mining Industry Group’s newly established chemical unit has been picked as one of the entities that could receive assets from Yangquan Coal Industry Group and Shanxi Jincheng Anthracite Mining Group, said the people, who asked not to be identified because the information isn’t public.

No final decision has been made and details of the merger are still in the works, said the people. The news was first reported by China’s Energy Magazine.