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Chinese coal mining a risk?
by Staff Writers
Beijing (UPI) Sep 4, 2012

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A series of coal mine accidents in China have called attention to the safety of the country's mining sector.

Chinese state-run news agency Xinhua reported Monday that the death toll rose to 45 from a blast last Wednesday in a mine in China's Sichuan province. That was followed by a mine explosion Sunday that killed 15 miners in Jiangxi province in eastern China.

Less than a week before the first accident, a spokesman for China's work safety regulator had said that coal mining remains a high-risk industry in China despite improvement during the last decade.

"We must stay clear-headed all the time and be on alert for coal mine safety," Huang Yi of the State Administration of Work Safety said at an Aug. 24 news conference.

There is a fatality rate of 35 workers for each 100 million tons of China's coal output, Huang said. That's about 10 times the death rate for the United States' coal sector.

The two latest accidents occurred at relatively small mines.

While small mines contribute one-third of China's total coal output, they account for about 85 percent of the country's 12,000 mines and are the biggest source of danger because of poor safety provisions and report two-thirds of all deaths annually in the industry, Huang said.

Xu Yi-chong, a professor of Australia's Griffith University in Brisbane told The Wall Street Journal: "To me, this is the main problem. The small coal mines tend to have very, very, very low safety standards and very, very, very low labor standards and are very difficult to regulate."

To help reduce the number of fatalities, Huang said the government aims to close 625 small coal mines this year.

Under regulations released in April, dangerous mining enterprises are required to spend at least $4.70 for each ton of production on improving safety, Xinhua reports. The report didn't specify the criteria for "dangerous."

One of China's largest miners Yanzhou Coal Mining Co., for example, highlights its safety record in its latest annual report, noting that it has recorded a rate of zero fatalities per million tons of raw coal mined in each of the past five years.

China, the world's largest miner and consumer of coal, produced 3.47 billion metric tons of coal last year accounting for 45 percent of the global total of 7.678 billion tons, says the World Coal Association.

Despite China's economic slowdown, Barclays still forecasts a 5.9 percent increase in coal production this year, to 3.6 billion metric tons, the Journal reports.

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China's Chalco scraps bid for Mongolia coal miner
Shanghai (AFP) Sept 4, 2012 - China's biggest aluminium producer Chalco said it had scrapped a planned bid to take a majority stake in a Mongolian coal miner, after Mongolia's government opposed the deal.

Chalco had aimed to acquire up to 60 percent of miner SouthGobi's shares in a deal valued at HK$7.2 billion ($928 million).

"The proposed proportional takeover transaction has minimal prospect of obtaining the necessary regulatory approvals within an acceptable timeframe," Chalco said in a statement to the Hong Kong stock exchange, where it is listed.

The Chinese company had terminated the agreement to buy out SouthGobi's biggest shareholder, Turquoise Hill Resources Ltd. (formerly Ivanhoe Mines), said the statement released late on Monday.

Days after the proposed deal was announced in April, SouthGobi said Mongolian authorities wanted to suspend some of its licences.

The Mongolian company said the government's Mineral Resources Authority had requested suspension of the exploration and mining licence pertaining to its flagship coal mine, Ovoot Tolgoi.

Under the original deal, Chalco would have purchased up to 100 percent of SouthGobi's coal production at market prices for up to two years, leading to concern among some Mongolian politicians over Chinese monopolisation of state resources.

The Ovoot Tolgoi mine is already providing coal to Chinese customers since it is located just 40 km (25 miles) from the Mongolia-China border.

Mongolia has opened up its mining sector to foreign investors in the hope of pulling thousands out of poverty, but the government faces mounting pressure to maintain a larger stake of the resources.

China on Monday expressed hopes that Chinese companies could cooperate with Mongolian firms in the mining sector.

"Chinese enterprises are encouraged to cooperate with their Mongolian counterparts on the basis of Mongolian law and international norms," foreign ministry spokesman Hong Lei was quoted as saying by the official Xinhua news agency.

Chalco was up 3.08 percent to HK$3.01 in Tuesday morning trade in Hong Kong despite the setback.



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THE PITS
China's Chalco scraps bid for Mongolia coal miner
Shanghai (AFP) Sept 4, 2012
China's biggest aluminium producer Chalco said it had scrapped a planned bid to take a majority stake in a Mongolian coal miner, after Mongolia's government opposed the deal. Chalco had aimed to acquire up to 60 percent of miner SouthGobi's shares in a deal valued at HK$7.2 billion ($928 million). "The proposed proportional takeover transaction has minimal prospect of obtaining the neces ... read more


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