Bloomberg News

China’s Sichuan Province Halts All Coal Mines After Explosion

May 12, 2013

China has ordered production suspended at all coal mines in the southwestern province of Sichuan after a blast on May 11 killed 28 workers.

“All coal mines across the province should be suspended immediately to have a comprehensive overhaul and thorough checks,” the State Administration of Work Safety said in a statement dated yesterday on its website. The province aims to close 500 small coal mines by the end of the year.

The explosion in the Taozigou coal mine near Lu County in Sichuan’s Luzhou city left 28 miners dead and 18 others injured, including three in critical condition, the official Xinhua Agency reported today.

China has been working to improve safety in an industry in which accidents killed 1,973 people in 2011 and 2,433 in 2010, according to the state administration. The U.S., the world’s second-biggest coal producer, had 48 deaths in 2010.

Sichuan is China’s 16th-biggest coal producing province, accounting for 0.6 percent of the 173 million metric tons produced by the nation’s coal mines, according to data from independent researcher Glinfo.com. Power-station coal at China’s Qinhuangdao Port fell to the lowest price on April 21 in more than three years as consumption slowed.

“The mine suspension isn’t likely to have any impact on coal prices nationwide,” said Jiang Weibo, a Shanghai-based analyst with Glinfo. “It would help stall local prices from further declines as Sichuan mines supply mainly to local users. The Sichuan market is pretty isolated.”

Initial Investigations

Coal with an energy value of 5,500 kilocalories a kilogram at Qinhuangdao slid to a range of 605 yuan ($98.40) to 615 yuan a ton on April 11, the least since Oct. 12, 2009, according to data from the China Coal Transport and Distribution Association. Prices were unchanged on May 5.

A total of 108 miners were working underground at the Taozigou mine around the time of the blast at about 2 p.m. on May 11, the Sichuan Provincial Administration of Work Safety said on its website. Initial investigations show illegal mining caused the explosion, Xinhua reported today.

China plans to shut about 20,000 unlicensed mines by 2015, the official Xinhua News Agency reported Sept. 19, citing Yang Dongliang, director of the work safety administration.

To contact Bloomberg News staff for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net


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