SHENZHEN (ResourceInvestor.com) -- China’s major coal-producing province of Shanxi has made a plan to shut down all illegal coal mines in its territory in the next three months, according to a notice released by Shanxi province government on September 20.
According to the notice, electric power supply, detonators which are necessary in mining process and coal transportation of illegal coal mines will be cut off from now on until they get the corresponding penalty and qualify for mining.
In the first half-year of 2005, more than 4000 coal mines without mining permit and eligible safety facilities were discovered in Shanxi. In the last five years, there are 45 big coal mine blasts with death toll over thousands happened in Shanxi due to illegal mining.
“On the one hand, lives of coal miners are invaluable. On the other hand, so much resource are wasted. It hurts the sustainable development policy.” Gong Anku, director general of Shanxi Coal Mine Safety Inspection Bureau said in a local TV interview on September 21.
In the south coal-consuming Guangdong province, all its illegal coal mines have been closed down for near one month since the severe coal mine disaster in which 123 people died happened in Xingning city on August 7.
National illegal coal mine crackdown had been executed for many times in the previous years but the effect were just temporary and formal. This time it is different since it comes along in the context that State Council determines to eradicate the coal industry corruption.
Xingning coal mine disaster is the fuse. In the investigation of this accident, many local officials of Coal Mine Safety Bureau were found having large stakes in Xingning coal mine.
Zeng Yungao, owner of Xingning coal mine once was just a poor driver 12 years ago. Later, by providing bribes and coal mine shares to local officials, he bought some coal mines in Xingning in low cost without legal mining permit and safety facilities and earned hundreds of millions Yuan in short time.
This startled the State Administration of Coal Mine Safety and even the prime minister Wen Jiabao.
State Council then begin to ban all sorts of stakes for officials in coal mines. The notice orders that after September 22, any official who still owns stakes in local coal mines will be punished.
In Guangdong, more than 70% electric power of is generated by coal. It needs to transport more than 60 million tonnes from inland provinces per year.
After the Guangdong shut down its coal mines, many local power enterprises turn to look for coal imports from Vietnam, Indonesia and Australia. According to the statistics from Guangdong customs, the coal import reaches 604,000 tonnes in August with a 21% raise comparing with last year. However, the others without import experiences have to go to Shanxi and other coal-mining provinces to secure the coal supply
“The mass crackdown of small and medium illegal coal mine may cause 50 million tons coal output reduction this year and 100 million tonnes next year.” Li Chaolin, market consultant of Henan Province Coal Distribution Co., Ltd. said.
Li said, due to the severe shortage of electric power supply and transportation capacity, the coal price kept soaring last year whereas from March this year, a nationwide coal overstock emerged and coal price slip sharply. “But now the supply-exceeding-demand situation is changing. After October, the coal price may rebound.”
“The winter is approaching but the coal stock will not be enough when this situation goes on.” Li Changji, coal industry expert of North Jilin province government said, “For most North provinces, the fourth quarter is a huge coal consuming season.”
