Coal supply crunch fuels safety concerns

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Jul 2008

The coal supply crunch has mounted pressure on mine safety in Shanxi province, China's leading coal production region, as local coal miners are forced to overproduce. The province is currently facing a coal shortage, which is expected to escalate to as high as 200 million tons, largely due to the huge coal demand across China. The certified production capacity of the province is 590 million tons, but the 1,922 existing mines only have a total production capacity of 539 million tons, as more mines are still under construction, said Wang Shouzhen, chief of the Shanxi coal bureau. The province, which produces one-fourth of China's coal, yielded over 330 million tons in the first half of the year, a 14 percent year-on-year rise. But coal sales to other provinces increased by 10 percent to 278 million tons during the same period.
This year, the province has to supply 370 million tons of contracted coal for other provinces and 270 million tons of contracted power coal, along with 200 million tons of coal consumed by its own industries and residents.
To meet the country's demand, many of Shanxi's coal miners, especially State-owned ones, are operating beyond their certified production capacity, a major threat to mine safety, Wang said.
In the first half of the year, 46 mine incidents occurred in Shanxi, which resulted in 124 deaths. This number, however, was down 22 percent from the same period last year.
"Overproduction has been a long-time threat to mine safety in Shanxi," said Liu Wenge, head of energy and safety division at China Coal Information Institute.
Although mines have always attached great importance to sustainable and safe production, energy crunch pushes them to intensify its production, Wang said.
Although mine safety in Shanxi has been improved this year, Wang said that serious mine disasters, which have occurred in the past are most likely linked to overproduction.
Overproduction has also added a further blow to Shanxi's fragile environment.
It has added to the dust pollution problem and increased the disruption of land and of underground water flows.
Experts said over 1.3 million cu m of water resource were damaged and 94 sq m ground subsidence formed each year as Shanxi's annual coal output is about 600 million tons.
The government should in the future utilize economic levers to solve energy and environmental problems and improving energy efficiency is the best way for miners to produce more and users to consume less, Frank Liu, spokesperson for UN Global Forum said.
Coal shortages have forced many regions to reduce power generation, leading more than a dozen Chinese provinces to ration power as the peak demand season approaches.
Analysts said the coal shortage was likely to drive price growth of energy and mount more pressure of inflation.

Source: China Daily