Mining industry 'near collapse'

PUBLISHED : Friday, 08 April, 1994, 12:00am
UPDATED : Friday, 08 April, 1994, 12:00am

CHINA'S mining industry is on the verge of collapse and the Government has virtually lost control over the illicit exploitation of the country's mineral resources, a Chinese news agency reported yesterday.

The Hong Kong China News Agency said the industry was in a dire situation because of cut-throat competition among mining companies. It urged the Government to ''re-establish'' its monopoly on selected mines to save the industry.

It said many state-owned companies had been driven to the wall by rural and township miners. Even peasants who had given up farming for mining had become a major competitor.

The first mining crisis for China, which opened up its mining industry in the early 1980s, came in 1987. Rural and township miners had access to as many as 70 per cent of the state-owned mines taking business from many state-owned mining companies.

Fierce competition forced the Government to intervene and introduce China's first mining law requiring all rural and township miners to register with government mining agents.

The agency said the law helped until 37 levies on farmers were abolished by the Government last year.

The agency said many mining agents went bankrupt because they relied on the income from levies.

Competition also increased as individual mines were exhausted. Another reason behind the chaos was the ''excessive intervention'' by local governments, said the agency.