Beijing has declared a top state mine bankrupt for the first time, after the mine ran up debts of more than one billion yuan (about HK$932.7 million).
It is the most dramatic example yet of the government's resolve to slim its coal industry despite the heavy social cost.
A court in Benxi city in the northeast province of Liaoning had approved, after receiving approval from the State Council, an application by the Benxi Coal Industry Corp for bankruptcy, the Workers Daily reported yesterday.
The company has mined coal for 90 years, with a peak output of five million tonnes a year, but started to accumulate heavy losses from the early 1980s. It has 36,000 workers, including 15,000 retired.
From 1995 to last year, the state invested several hundred million yuan to help the company set up alternative businesses, but most failed because of a bad market situation and poor management and went into the red.
By the end of last year, the company had debts of 1.02 billion yuan, including interest and principal on bank loans of 566 million yuan.