Below is the article published by Reuters:

The Baofu highway, a road that serves the mines in China's coal-producing hub of Ordos, was largely empty on a recent visit. A few years ago, it was so clogged with trucks that the traffic jams were legendary, sometimes lasting several days.

To either side, rows of once busy restaurants are closed, and flanked by advertisements for discounted coal. At mines that are still operating, unsold coal is piled high and lacking its black sheen, having been exposed to the elements for months.

China's top producing coal province of Inner Mongolia, where Ordos is located, is in crisis.

Tumbling prices, caused by weaker demand due to slowing growth in China and a flood of cheaper imports, have forced many smaller miners out of business, while some major firms are slashing wages by up to 50 percent to stem heavy losses.

Chinese coal prices are at 6-year lows, and miners in Inner Mongolia and elsewhere are grappling with overcapacity, sluggish demand and shrinking bank credit, industry experts said.

The troubles faced by small miners in the region are likely to be replicated across China's coal industry, posing a risk for China's financial health if there is a wave of bankruptcies.

Weng Qing An, chief financial officer at China Coal Energy, the country's No. 2 producer, said the outlook for miners across China was grim.

"If coal prices continue to slide, it will be hard for many companies to survive. The whole industry will undergo a major consolidation," he told a recent results briefing in Hong Kong.

Miners in the land-locked northern province of Inner Mongolia are bearing the brunt of the slump because they are far from coastal buyers. Many are also a long way from railways and ports, forcing them to rely on expensive trucking for delivery.

In the Ordos mining district - which accounted for a fifth of China's coal output at its peak in 2012 - about half of the 20 private mines visited by Reuters last month were shut, rows of coal excavators and trucks locked away in their yards.

It is not clear how many mines have gone out of business, or shut down temporarily, but veteran coal traders said a further drop in prices could force more than a tenth of about 300 mines in Ordos to fold.

"The bigger ones can stomach the losses to maintain market share, but those without financial muscle have stopped production," said Li Ji, a coal analyst at Galaxy Futures, a brokerage in Beijing.

China Coal's Weng said a third of the medium- to large-scale miners in China were already incurring losses after a 16 percent drop in prices last year.

Of 32 Chinese coal companies listed on Reuters Starmine, nine had a default probability of between 2-4 percent within the year, much higher than the average default probability of 0.38 percent for all companies listed on the mainland.

The coal firms' cash-to-short-term debt ratio had also fallen to below 1 for the first time in at least 7-1/2 years, as of Sept. 30 [2013], suggesting a lack of cash to cover debts maturing within a year.

In a bid to reduce costs, some of the biggest Inner Mongolia miners have cut salaries by 20-50 percent, company sources said.

Some employees at Inner Mongolia Mengtai Coal and Power Co. have taken a 50 percent pay cut since late last year, sources at the firm told Reuters.

Inner Mongolia Yitai Coal, which reported a 48 percent drop in 2013 net profit, has also reduced salaries for some workers since the start of 2014, company sources said.

Neither company responded to requests for comment.

After a 16 percent drop in 2013, spot prices at the top Qinhuangdao port have shed another 15 percent since the start of the year to 525 yuan ($85.93) a tonne, lower than 2008 levels when prices were first published. Prices rose above 900 yuan in 2008, sparking a rush of mine expansions and new developments.

Li of Galaxy Futures estimated that miners in Inner Mongolia could be losing at least 20-30 yuan for each tonne of coal they produce.

Inner Mongolia's 2013 coal output rose 0.7 percent to 1.03 billion tonnes, accounting for about 30 percent of China's total, driven by major producers who benefit from lower costs.

Besides traditional banks, coal miners in Inner Mongolia and beyond have relied heavily on China's shadow banks - an unregulated sector made up of private lenders, trust companies and corporate bond issuers - to fund a recent expansion spree.

With banks acting as sales agents for the high-yield products offered by shadow banks, major lenders risk severe losses if weak corporate borrowers default.

In February [2014], state media said six Chinese trust firms had lent $824.6 million to a delinquent coal company. Investors in one product vowed to seek repayment not only from the trust firm, but from the country's No. 2 bank, China Construction Bank , which had sold them.

While the fire sale of luxury cars and homes was a common way for coal bosses to raise cash last year in Inner Mongolia, the near year-long price slump has forced some shadow lenders to seize mines after owners defaulted on payments.

"Some companies pledged their mines to us as collateral. After owing us payments for months, we have no choice but to take over the mines to try to recover our money," said an official at a Chinese trust company who declined to be identified due to worries about bad publicity.

"With such a dire market outlook, who knows if we can even get our money back?"

His firm was charging an annual interest rate of 30 percent for loans compared to at least 10 percent at the major banks, and recently seized two small mines in Inner Mongolia with an annual production capacity of about 3 million tonnes, the official said.

Still, industry turmoil may prove the catalyst for the consolidation the bloated sector badly needs, experts said.

Any consolidation would have little direct impact on Chinese pollution, as almost all mine sites in China already meet strict requirements on containing coal dust.

China's coal output rose 0.8 percent last year. But with bulging inventories at mines and ports, analysts said output needs to fall for the market to return to balance.

"This is the bitter medicine the sector needs. Too many have been blindly expanding for too long and the market is awash with coal," said a veteran coal trader in Guangzhou, capital of China's southern Guangdong province. ($1 = 6.2094 Chinese Yuan) (Additional reporting by Charlie Zhu in HONG KONG and Patturaja Murugaboopathy in BANGALORE; Editing by Mike Collett-White).