Shanxi will close more mines to cut disaster toll

PUBLISHED : Monday, 24 July, 2006, 12:00am
UPDATED : Monday, 24 July, 2006, 12:00am

Governor says big pits will take over smaller ones

Large coal mines in Shanxi province will operate or acquire smaller competitors from next year as part of a plan to better manage operations and reduce accidents, Governor Yu Youjun says.

The provincial government has already closed 4,876 small, illegal coal mines since last September and will shut 1,400 more by the end of the year. The closures are part of Mr Yu's plan to consolidate the remaining 10,000 coal mines in Shanxi, which has witnessed several large-scale mine accidents this year.

'The main cause of coal mine disasters in Shanxi is the numerous openings of mines and the scattered locations of these mines,' Mr Yu said in Hong Kong yesterday.

One reason why 'there are so many mine incidents in Shanxi has to do with the quantity of coal produced ... It's inevitable there would be more incidents with such high demand [for coal]'.

As part of its revamp measures, the provincial government will also equip the large mines with newer equipment.

Mr Yu said that by having the larger sites either acquire or operate smaller mines, operating standards would be lifted and management made more efficient.

Of the nearly 10,000 coal mines left in Shanxi, 80 per cent to 90 per cent were small, with low production levels, said Mr Yu.

He was speaking at a press briefing in Hong Kong to launch a three-day investment conference to attract businesses to investment projects in Shanxi. He had already met Hong Kong business tycoons, including Li Ka-shing, and bankers at Morgan Stanley.

Mr Yu said the provincial government was in the process of setting up a 10 billion yuan energy investment fund. The plan has attracted interest from many investment funds, banks and local and overseas investors, and is awaiting approval from the State Council.

Describing the central province as one of the least developed on the mainland, like Guangdong in the early 1990s, Mr Yu said Shanxi had the potential to attract investment into its natural resources and raw materials industries.

The province's coal reserves and output account for a third of the total volume on the mainland. It is also rich in coal bed methane, gold, silver, copper and iron.

The provincial government has implemented a strict policy covering coal mine investment by local or overseas investors.

Mr Yu said this was because there needed to be careful planning of production output so it met market demand.

Since being named governor of Shanxi last year, Mr Yu has pushed for a revamp of the coal industry.

He started by closing thousands of illegal mines, many of which were backed by corrupt local officials.

He was formerly mayor of Shenzhen and a vice-governor of Hunan province .