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China's 'Two Sessions' 2016

Miners’ protest: ailing Chinese coal firm Heilongjiang Longmay told to pay workers

Biggest coal enterprise in China’s northeast plans to lay off up to 100,000 workers to cut overcapacity, but has yet to pay many of them

PUBLISHED : Sunday, 13 March, 2016, 7:40pm
UPDATED : Monday, 30 May, 2016, 5:09pm

The government of northernmost Heilongjiang province has vowed to “financially support” a struggling state-owned coal firm after miners went to the streets to protest over unpaid wages.

Governor Lu Hao said on Saturday that his government would continue to support Heilongjiang Longmay Mining Holding Group but also ordered the firm to pay its miners their overdue salaries, a government statement said.

It was the first time Lu, who is in Beijing for the annual National People’s Congress, has acknowledged backpay problems at Longmay, the biggest coal enterprise in China’s northeast.

READ MORE: The chill wind blowing through China’s ailing coal industry

Lu’s promise came hours after miners and their families took to the streets in Shuangyashan to demand their wages.

Videos online showed angry miners holding banners and shouting slogans. One banner read: “We want to live. We want to eat.” A video showed the miners being dispersed by armed police.

But Lu’s latest comment contradicted remarks he made just a week ago at a Heilongjiang delegation meeting during the congress, in which he said the miners did not have “even a penny” cut from their pay. Lu had also cited Longmay as a prime example of an inefficient, overstaffed state-owned firm, saying that the government could not afford to bail out the group.

Longmay, which has been in the red since 2012, has to comply with Beijing’s order to cut industrial overcapacity. It said last year it would cut its 248,000 headcount by as much as 100,000. But Lu said productivity was still three times lower than the national average.

On Saturday, Lu blamed Longmay for withholding information about its employees’ unpaid wages and vowed to “severely punish” anybody who dared do so again.

READ MORE: Hard times for China’s coal miners means China Shenhua Energy is worth a look, analysts say

The government would continue to support the firm to liquidate its assets and collect funds to pay workers, he said.

A former central regulatory official with knowledge of the issue told the South China Morning Post earlier that Longmay’s problems stemmed from years of miscalculated policies that needed more than financial aid to resolve.

“The problem is even worse than what is revealed,” the official said.

The mainland has promised to set up a 100 billion yuan (HK$120 billion) fund to help laid-off workers as it faces the daunting task of eliminating massive industrial overcapacity across the country.