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For better or worse, China is stuck on coal

SANDAOLING, China - Dong Ye lights a cigarette and doesn’t give a second thought to fate -- his or his country’s -- as he steps off a dump truck onto the dirt road that winds into the Sandaoling coal quarry.

He has spent his 15 years of adulthood working in one of China’s grittiest and most dangerous industries and coal mining is all he knows.

“Our parents’ generation and grandparents’ generation worked here,” said the lanky driver as a pair of colleagues nodded in agreement under the punishing sun. “Our wives work here too.”

The fate of the sleepy mining town of Sandaoling -- and of the entire country and its booming economy -- is tied to coal.

“The economic development is going to be extremely significant,” said Graham Wailes of AME Mineral Economics based in Sydney. “It is going to need large loads of energy.”

In China, that means large loads of coal.

Miners chipping chunks of coal for the past 46 years have carved a wide gash into the Earth with huge black terraces that run for hundreds of yards.

Coal is the lifeblood of China, and when the mine was founded in 1958 coal sparked life in Sandaoling, in the middle of the desert in the western region of Xinjiang.

Coal by the numbers

The country is already the world’s top producer of coal and is expected to pull 1.9 billion tons from the ground this year, up 10 percent from last year. In 2010, it aims to raise that to 2.2 billion tons.

Furthermore, three-quarters of China’s 400,000 megawatts of installed power capacity, the world’s second-largest after the United States, are fired by the jet black fossil fuel.

This leads to worries about increased air pollution and the release of ever-larger amounts of the greenhouse gas carbon dioxide.

Coal remains near the top of the list of industries critical to maintaining China’s robust economic expansion. Oil is also up there, increasingly important as the economy booms, and the country is working hard to diversify its sources of oil.

And yet, for such an important industry, coal is a mess.

China’s coal industry, perhaps above all else, is inefficient, particularly in transport.

Roads and railways cannot keep up with demand. Industry officials say the overloaded train system can only transport 40 percent of the coal that needs to be shipped.

A coal squeeze, exacerbated by the transport problem, has threatened normal operation of thermal power plants and contributed to the worst electricity crunch in 20 years.

Furthermore, rocks and dirt account for perhaps 20 percent of the weight of what gets trucked out of Chinese coal mines, estimated Nomura analyst Russel Young in Hong Kong.

Part of the problem is that many, if not most, of the country’s 30,000 mines are tiny and tough to regulate.

That fact also gives China’s coal mining industry its most tragic, yet defining feature -- its carnage.

In the first seven months of the year, 2,993 people died in explosions, floods and other mine disasters, the State Administration of Coal Mine Safety said. China’s average is roughly four deaths per million tons of coal produced.

State-owned Sandaoling averages about 0.3 deaths per million tons of coal and it has never experienced a disaster, its director said, because it invests $600,000 a year in safety measures to protect its thousands of employees.

Not all mines are so fortunate. Government campaign after campaign to lower the number of deaths has had little effect.

With vast swathes of China left in the dust of the economic boom, jobs are hard to come by and miners have little choice.

“China’s too big a place to pick and choose your work, and quit one job to find another,” said Dong. “If you’ve got 10 people in your family, how are you going to feed them?”

Asked if he would ever work in an underground coal pit, Dong, who earns about $120 per month as a trucker, did not hesitate to say yes, explaining that the pay is better.

Environmental cost

Apart from the danger inside the mines, coal that's burned on the outside is a major source of pollution, especially acid rain.

"The regional acid rain pollution is still out of control and even worse in some southern cities," Wang Jian, an official with the State Environmental Protection Administration, was quoted as saying.

China is the world's largest source of soot and sulfur dioxide emissions from coal, which fires three-quarters of the country's power plants.

More than 21 tons of SO2 were discharged in China in 2003, up 12 percent from the year earlier.

"It is estimated that the country will consume more than 1.8 billion tons of coal in 2005, emitting an additional six million tons of SO2," Wang said.

China says its planning to set quotas for SO2 emissions from power plants, and urging them to install desulfurization facilities, through Wang admitted earlier efforts had led to no obvious improvements.

China has already banned the use of coal in some areas most severely affected by SO2 emissions, but sulfur is not the only enemy in the fight against acid rain.

"The amazing growth of nitrates, thanks to a swift rise of automobile and coal consumption plus overuse of fertilizers, is playing an increasing role in the country's acid rain pollution," said Tang Dagang, director of the Chinese Research Academy of Environmental Sciences.

Hard to move away from coal

But coal is here to stay, because it is abundant and the alternatives are generally more expensive.

“They are trying to force more utilization of gas, trying to eat into reducing the coal consumption in China, or at least diversifying away from it, more nuclear power,” Young said.

But he added: “China’s got so much coal reserves that obviously it can’t move too far away from coal.”

No one in Sandaoling is moving away from coal any time soon either.

Li Chunsheng, Sandaoling's director, said 60 million tons had been produced at the mine already and it is expanding rapidly.

It produced nearly four million tons last year and plans to be able to produce 10 million tons a year by the end of the state-directed 11th Five Year Plan, in 2010.

Li said the mines and quarry at Sandaoling still had 40 to 50 years to go before they ran dry.

After that, fate will decide the future.

“The state puts great emphasis on coal and the regional government has shown great care for us,” he said. “And they will gradually equip us with a new base for coal and energy.”

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