Mining accidents grows with coal prices [China]

Author: Shanghai Securities News, Published on: 31 July 2007

[Original article in Chinese. Title translation, and following summary of the article's key points, provided by Business & Human Rights Resource Centre.]
The mining accident at Zhijian Mining on July 29 led to 69 people being trapped in the mine. As the demand for coal increases in summer, in June 2007 the average coal price increased, and national coal output increased by 7%. Coal mine accidents increased 130% in June from the previous month. Li Yizhong, chief of the State Administration of Work Safety (SAWS), points out that these accidents can be attributed to illegal mines lacking safety measures and mines producing beyond their authorized output. The unauthorized production factor constitutes at least 60% of major mining accidents in the past few years, including the Meizhou Daxing Mining accident in Guangdong province in August 2005 that caused 123 deaths, and the Shanxi Datong Zuoyun County Xinzheng Mine accident in May 2006, that caused 57 deaths. Analysts observe that in the Zuoyun County accident, the mine had been producing 8 times its authorized output when the accident happened. However, it is envisaged that the price hike will stop. National Development and Reform Commission projects the national coal demand to be 2.45 billion tonnes in 2010 while the national coal output capacity will be 2.9 billion tonnes, more than 0.4 billion tonnes in excess of the demand. Moreover, safety insurance and maintenance costs of the mining industry continue to increase, which will narrow the profit margin for the smaller mines. In view of these factors, mining accidents are expected to decline gradually.

Read the full post here