China’s coal production restrictions are a “stealth” bailout for miners and their creditors that may last until the end of the decade as the policies help boost prices, according to Goldman Sachs Group Inc.

Without government intervention, China’s coal industry wouldn’t be able to service the nearly 3 trillion yuan ($444 billion) in debt from investing in new mines before demand started to drop, the banks analysts including Christian Lelong wrote in an Oct. 20 note. The twin goals of the mining restrictions have been to develop a “safe, solvent and efficient” industry and protect the country’s financial system from the risk of large-scale defaults, they wrote.

“Production controls amount to an indirect bailout of the Chinese coal industry that minimizes the impact on the government and the financial sector, unlike more conventional methods such as subsidies and writedowns,” the analysts wrote. “Creditors, rather than mining companies, are the effective beneficiary of government intervention in the coal market.”

China’s coal production has fallen after the government of President Xi Jinping ordered miners to lower output to the equivalent of 276 days of production, down from 330 days, to help alleviate a glut. Output plunged 10.5 percent during the first nine months of this year as a result, government data showed.

Cash Flow

As a result of the price increases, Goldman Sachs analysts forecast average quarterly cash flow for miners will swing to a $17 billion gain in the fourth quarter from losses of $15 billion during the first two quarters of the year. The nation’s

The nation’s top economic planner last month started to fine tune the policy amid the price surge, allowing some miners to increase output to alleviate the recent tightness ahead of peak winter demand. The domestic benchmark power-station coal price at the port of Qinhuangdao climbed to an average of 610 yuan a ton as of Oct. 16, the highest since May 2013 and up 65 percent this year, according to the China Coal Transport and Distribution Association.

The industry’s debt burden should reach a manageable level by the end of the decade after borrowers pay off commitments incurred from operating losses since 2012, repay loans related to the construction of surplus mining capacity and finance the permanent closure of some mines, the analysts wrote in the report.