Part 2: The human price of coal
By Miao Ye

Part 1: Hydropower, wave of the future?

HONG KONG – Driven to boost its economy, coal-dependent China has undertaken a potentially hazardous tradeoff: increasing the production of coal at what could be the price of mine safety. It certainly will mean more coal – and very possibly more dead miners.

China, the world’s largest coal producer, burns more than a billion tons of coal a year to produce 75 percent of its energy, and there is a production shortfall – a major factor in the nation’s power famine. China has decided to increase production, but the price could be high in terms of safety.

China’s coal-mining industry is among the most dangerous in the world and ordering higher output runs the risk of increasing the already high rate of coal-mine accidents. Last year, by December 21, 1,035 workers had been killed in 50 “large scale” disasters, including explosions and cave-ins, according to the State Administration of Work Safety. The number of deaths in smaller accidents – possibly higher – was not disclosed. In 2002, about 6,900 miners were killed, according to government figures.

China has thousands of small mines and pits, many of them uncertified and having abysmal safety records. Yet they account for a major portion of coal output. At one time, China had more than 430,000 small mines, many of them now closed, so the task of regulation is daunting.

The government doesn’t want more highly publicized disasters, often caused by poor mine construction, lack of safety equipment, precautions and education, but it needs more coal.

Between January and September 2003, a total of 21 power grid zones nationwide resorted to electricity blackouts to prevent system collapse, while only those in the northeast, a coal-mining region, reported a slight energy surplus, according to the State Grid Corp of China. The corporation is a large enterprise approved by the State Council to operate power transmission, distribution and other aspects of the electrical-power industry and to ensure a continuous electrical supply.

The national power shortage results mainly from the fact that coal-burning power plants, more than 70 percent of China’s total installed electrical capacity, are still 3 million tons short of the pre-set goal for coal stores, thus limiting the required power generation, according to the grid corporation.

Mine safety campaign short-lived
To alleviate the power famine, coal producers were ordered last autumn to increase output and guarantee the supply for coal-fired power plants. The State Development Planning Commission decreed on November 26 that “to ease the demand of coal and to strike a balance between production and safety, the most direct solution is to increase the amount of coal production”.

Major mines, such as those in Shanxi and Hunan provinces, “should intensify their coal production and supply as much as possible”, the commission directed.

At the same time, those coal mines still “under rectification” – ordered to slow down, pause or close to improve safety – were ordered to resume production as soon as possible. The National Development and Reform Commission (NDRC) announced an end to the short-lived policy to “rectify the coal-mining industry”.

Last August, because of frequent grievous accidents, Premier Wen Jiabao insisted upon the overhaul of mine safety and initiated the rectification campaign. It lasted only a few months.

While initially taking a tough line on improving safety, Beijing was stunned by the resulting drastic reduction in coal output. Most of the mining pits that have been ordered to halt and improve safety or that have been closed for major safety problems are small, but they are numerous and contribute greatly to coal production.

Northern China’s Shanxi province, known as China’s “coal warehouse”, boasts one-third of the country’s gross coal reserves and 6,000-plus small coal mines. Authorities estimated that its fourth-quarter output would be cut by 40 million tons after the shutdown of small pits following a series of three explosions in August 2002 that claimed more than 98 lives.

Suspending small and medium-sized pits has triggered the coal shortage and worsened the power shortage, which could eventually hurt steel, cement and other critical industries, even pushing some enterprises to the brink of closure.

Despite their awareness of the potentially devastating consequences, the authorities in ending the rectification campaign have chosen to ensure a sufficient power supply at the expense of coal-mine safety.

The head of the NDRC emphasized the importance of maintaining an abundant coal supply during a major meeting on coal supply on November 25. He called maintaining an adequate coal supply a critical measure for accomplishing the nation’s economic objectives.

Coal supply as a ‘political mission’
According to development and reform guidelines, coordination between coal suppliers and users should be improved. All coal-producing provinces and enterprises, especially state-owned coal mines, must further explore their potential and especially must fully implement their supply contracts for 2003, the NDRC said.

The Shanxi Economic Commission, a government organization regulating the provincial economy, also convened a meeting of coal producers and power enterprises on December 5 and declared that maintaining and improving coal supply and production was a “a political mission” closely tied to economic development – even social stability.

At the province level, the national order to shift the focus of coal-mine operators from work safety to increased output is very likely to mean work overload and overtime. The rectification and safety campaign has meant new safer equipment, such as gas detectors and electrical wiring, better construction and bracing for mines, better safety education for miners and mine managers, rest periods and limited working hours, among other improvements.

Since all small coal pits were shut down for rectification in August 2002, Shanxi province has only four state-owned coal corporations still running, including Shanxi Coking Co, Lu’an Mining Corp, Jincheng Anthracite Coal Mining Group and Pingshuo Coal Industry Corp.

Yet coal production in the third quarter decreased by 34.64 million tons from the second quarter, because the closed pits actually add up to 50 percent of the gross output in the province. By the end of November, however, the overall production figure had increased by a staggering 22.29 percent over the same period last year.

Lu’an, Jincheng, and Pingshuo mining corporations all recorded output increases of more than 25 percent. Clearly, the mines were being operated at full load and full speed to meet the national demand for higher output.

Silence at the top
Virtually no public figure has publicly criticized the speedup, and the apparent tradeoff between safety and output.

According to the Shanxi Administration of Coal Mine Safety, half of the closed mines have resumed production since late October, when the pace of safety inspections increased, and more were deemed qualified and reopened by the end of the year.

Some Chinese officials predict that the price of coal will continue to rise for some time, and then may fall as numerous small mines are reopened, increasing output.

The fear that output might decrease and stall the economy has prevailed over the initially proposed top-to-bottom overhaul of Shanxi province’s coal-mining operations.

On the other hand, Premier Wen, chairing State Council meetings last June 18 and August 27, said specifically that coal-mine safety administration should be strengthened, rectification advanced and safety rules and regulations stringently implemented.

In 2004 the central government will appropriate 2.2 billion yuan (US$265 million) for coal-mine safety, after an earlier total injection of 4 billion yuan in 2002 and 2003. The state also is developing a new mechanism to guarantee sufficient funding for mine safety.

The unexpected “power famine” – and the resulting need to increase output – disrupted Premier Wen’s plan and call for safety. Whether the output increase will be achieved on the altar of more casualties remains to be seen.

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