As China’s Small Mines Stay Shut, Crisis Grows

After shutting down small coal mines across China due to environmental and safety concerns, Chinese officials are encountering pricing problems as they try to reopen the mines to alleviate a coal shortage. From the International Herald Tribune:

A push by China to reopen thousands of small coal mines is failing, deepening its worst power crisis in years as local officials still fear Beijing’s wrath if they suffer high-profile disasters.

Weeks after the central government urged miners to reopen the mines, effectively reversing a years-old policy of shutting them in order to improve safety, local officials are proving reluctant. And Beijing’s freeze on coal prices has lowered the incentive for miners.

The failure to increase domestic coal supplies spells trouble for coal-fired electricity generators, who produce four-fifths of the power in China and could add to the emerging power crisis, which has already forced aluminum smelters to cut output by up to a tenth and could stoke demand for oil.

As if to reinforce the reluctance of local officials to reverse course on coal, Xinhua reports 10 workers were trapped in a flooded coal mine in Shanxi today.

July 13, 2008 2:34 PM
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Categories: Economy