FEATURE: Accidents propel Beijing to check 38 coal mines
A five-page document from the administration obtained by Mysteel and dated January 8 directs provincial authorities to formulate plans for temporarily idling mining at the identified mines under their jurisdiction and for the local governments to return detailed reports of how this will be achieved to the administration before January 14. Almost all the mines produce metallurgical coal.
Operations at those mines, which Mysteel calculates boast a combined 88.76 million tonnes/year capacity for all types of coal, are to be stopped during the inspections, the directive stressed. Industry sources said the mining departments of local government offices will likely be responsible for arranging for the inspections to take place. However, this was not spelt out in the directive, nor was any deadline given by when the inspections must be completed.
“The inspections will be conducted at mines over 1,000 metres deep and on those susceptible to rock bursts, fires and gas explosions,” an East China-based source familiar with this matter said. “Beijing had ordered checks be carried out for the same issues nationwide soon after the serious accident in Shandong caused by a rock burst last October, but it turns out that some mines have not been checked yet.”
A rock burst in a tunnel at a coal mine in Yuncheng in Shandong province on October 20 eventually claimed 21 lives and led the provincial government to order 41 coal mines in Shandong to cease operations and immediately commence special safety checks, as Mysteel reported. But the thoroughness of Shandong’s inspections became a highlight just weeks ago when an accident at the Tangyang underground coal mine in Jining, Shandong, claimed another three lives, as reported. Tuesday’s directive from the Mine Safety Administration betrays a sense of frustration with local authorities, Mysteel notes.
The East China source pointed out that if the forthcoming checks reveal that safety issues at the mines will be difficult to resolve using available technology, the mines will be added into the lists of mines eyed for ‘capacity removal’ by local governments, indicating those mines will be permanently closed. Moreover, even for mines which have minimized those risks, mine owners and mine managements will be obliged to reduce mine production by 20% in the future, Mysteel was told.
Among the 38 mines identified, no fewer than 20 are located in Shandong, a province whose geology makes it carry a higher risk of rock bursts. “One of the country’s largest fault lines is in the east region and happens to cross Shandong province – which greatly increases the risks of mining accidents,” a geological researcher based in Hangzhou, East China, explained. “We often monitor small-scale earthquakes in Shandong’s Zoucheng region which we attribute mainly to collapses at underground coal mines in the area due to its fragile geological structure.”
According to Mysteel’s survey, most of the mines on the administration’s list are coking coal mines. This being the case, if all mines were idled for inspection even temporarily, regional met coal supply will be constrained.
A Shanghai-based coal sector analyst agreed. “Merchant coke producers and steel mills are actively replenishing coking coal stocks now to ensure smooth operations during the Chinese New Year holiday (February 4-10). The impact on the market from disruptions to output could be well linger beyond the holiday period, depending on how long the inspections last.”
As of January 10, Mysteel’s national price index for spot coking coal remained unchanged on week at Yuan 1,237/t ($183.2/t) including 16% VAT Thursday, according to Mysteel’s assessment. However, some miners in Shandong were heard to have ceased offering discounts on coking coal sales for this month, which industry watchers suggest is a response to supply concerns in the market following the previous rounds of safety inspections.
Written by Sean Xie, xiepy@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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