The Coal Mine Dilemma in China

Here is the dilemma.  On one hand, there are so many mining disasters with so many casualties.  On the other hand, if the coal mines are closed down, it will affect the livelihoods and investments of many people too.  We have read about the mining disasters, but the translated story below is about the other side when Guangdong started to shut down the coal mines.  Below that is the alternate version of the same events from the official Nanfang Daily/Southern Metropolis Daily.

(Chinese News Monthly)  Guangdong blows up wells and mines to let Zhang Dejiang keep his job.  By Yi Ran (亦然).  January 1, 2006.

[in translation]

There was a huge mining disaster on August 7 this year in Xingning (Guangdong), with 123 mine workers losing their lives in this tragedy.  As time moves on, the mining disaster is fading in people's minds, but the aftershocks have not ended.  In order to keep the positions of the government officials, Qingyuan has adopted the "Four Not To Be Seen" policies pursuant to the decision to leave the coal mining business.  This has caused several million people to lose their livelihood and the private mine owners to love their investments.

After the August 7 mining disaster, the Guangdong provincial senior officials were clear and determined with respect to the problem of the coals mines.  On August 10, three days after the Xingning mining disaster, the provincial government issued an order for all coal mines to cease operations.  On August 14, the provincial governor Huang Huahua signed the provincial government "2005 No. 27" document to reiterate that all coal mines must cease operations to await inspections as well as demand Shaoguan, Meizhou and Qingyuan must "take sterner measures."  By 'stern,' it means that all those mines without permits to operate, or those mines which do not have all three permits and one license (permit to extract coal, permit to produce coal, permit of qualification for the mine director and license to operate), or those mines with high gas content, or those mines with flooding problems will all be shut down.

According to analysts, the provincial government clearly intends to move out in total from the coal mining industry, which has a yield of only 8 million tons per year.

Qingyuan party committee secretary Chen Yongzhi obviously understood what the provincial government meant by "sterner" measures.  Between August 16 and 19, under his personal supervision, a law enforcement team of several hundred people formed from the public security bureau, the procuratorate and the court went visited 51 coal mines in the city one after another.  The goal is to implement that "Four Not To Be Seen" policies: 1. The mine will be gone; the factory buildings will be gone; all equipment and facilities will be gone; all people will be removed from the site).

These mines were legal mining enterprises that were certified as meeting the standards according to the 1999-2001 "Shutting down mines and reducing production" policy of the State Council and inspected by the provincial and municipal government, with Coal Production Permits that are effective until December 31, 2008.  In recent years, these mines have also invested huge amounts of money in accordance with the Guangdong provincial government requirement to "turn annual production of 10,000 tons to 30,000 tons and 30,000 tons to 60,000."  In order to do so, they had to borrow money from banks or gather more private capital, and they have rated as B or better by the ratings agencies in terms of safe production conditions and they meet the conditions to acquire the "Safe Production Permit."

But now the Qingyuan authorities did not care anymore.  They went in and blew up the mine entrances and they demolished the factories at the ground level.  Dozens of equipment setups worth millions of yuan were buried with the mines because there was no time to disassemble them.  This brutal way of shutting down the mines caused the mine owners to suffer billions of yuan in economic losses.  This also caused tremendous economic damage to Qingyuan, which is a poor area of Guangdong province.  During the removal process, certain coal mines attempted to defend the mine and their people clashed with the police.  The police had to use tear gas to disperse the miners.  Many people were hurt and several were arrested.  On August 29, for the first time in Qingyuan history, several thousand Yau and Zhuang ethnic minority members showed up to petition to local government about their livelihood.

According to information, Qingyuan party committee secretary Chen Yongzhi said at one of the mining sites: We must insists on closing down the mine and we will not stop until we reached our goal.  We must take the advantage of the fact that the provincial party and government are fully on board with cleaning up to mines to use iron-fisted methods to clean the mines and to defuse this 'time bomb' with legal methods ...

Analysts point out that Chen Yongzhi is ignoring the constitutional protection of private property when he blows up the mines while sacrificing the economy of Qingyuan because the August 7 Xingning mining disaster has threatened the career paths of Guangdong provincial party secretary Zhang Dejiang and other deputy governors who are responsible for industrial and production safety.  Therefore, he is taking drastic measures to protect Zhang Dejiang and others officials.

Two months after Qingyuan implemented the "Four Not To Be Seen" policies, Shaoguan (which accounts for almost fifty percent of all coal production in Guangdong) announced in mid-October that Shaoguan will withdraw from the coal mining business and all 111 coal mines will be shut down!

The difference from Qingyuan is that most of the miners in Shaoguan are from Hunan.  These Hunan business people are more volatile.  When they saw that their assets were going down the drain, the miners formed defensive squads to prevent the government from blowing up the mines.  To protect their property, they threatened to cut off the Beijing-Guangzhou railway line to get the attention of the central government.  These actions made the Shaoguan government leery of taking action.

The most incomprehensible thing is that the source of this whole affair -- Meizhou -- has so far not taken any extreme actions.

In order to protect their rights, 32 coal mine owners flew to Beijing in late August to present their cases to the National People's Congress and State Council officials.  They asked the central government to condemn and rectify the actions of the Qingyuan government.  They wanted the local government to adhere rigorously to the spirit of the notice from the State Council, the National Safety Production Supervisor Bureau and the Guangdong provincial government to renew the inspection and cleaning up at the 51 mines and to let them resume production after all inspection results are found to be satisfactory.

After the Shaoguan government announced the shutting down of the coal mines, the 111 mine owners in Shaoguan also entered the resistance movement.  They sent an urgent letter to request assistance from Premier Wen Jiabao and they said the simple statement by the Shaoguan government "to withdraw from the coal production market" is a violation of their rights.  The direct losses to the investors will be more than 5 billion yuan, and the indirect losses are inestimable with more than 100,000 people being unemployed and more than 1 million people will fall into economic hardship, thereby causing social instability.  "While the city party and government leaders will keep their jobs, the economy of Shaoguan will be nearly ruined and retreating by at least ten years.

Li Chuxin is the party director of Jiubo town, Lianzhou in Qingyuan city and he is an investor in a local coal mine . He put in all this money, plus a loan of 300,000 yuan from the bank.  In speaking of this ruinous disaster, this old Communist Party member choked and said: "Our villagers used the money selling tomatoes and other vegetables that they grow to gather 500 yuan or 1,000 yuan to obtain shares for this coal mine.  We never expected ..."  "In the past, our village was progressive and unified.  We have never have mass incidents.  This time, more than a dozen villagers were arrested when they fought back and some of them will even have to go to jail.  These simple villagers are emotionally worked up.  I don't know how to explain to me."  "My monthly wages are 210 yuan.  I can barely live on it, never mind paying the money that I owe from the mine.  I intend to go and work in a mine in Guizhou and earn money to pay back the debt."

At the moment, the events in Qingyuan and Shaoguan have shaken up the central government.  Xinhua and other official media have reported the situation to the central government via internal reference publications.  The National People's Congress has sent an investigative team to the locations in Guangdong.  There is broad attention over who will win this chess game between the private capitalists and the local governments, because it involves whether the constitutional protection of private property is actually guaranteed in practice.

(Southern Metropolis Daily)  Xie Sijia (谢思佳).  January 9, 2006.

[in translation]

Recently, a summary report concerning our province's efforts in carrying out the closing and cleaning up of coal mines has been submitted by the provincial safety monitoring bureau to the Guangdong provincial government and the national safety monitoring bureau.  This report showed that after more than four months of forceful work, Shaoguan and Qingyuan have withdrawn completely from the coal mine business, while only 10 coal mines are left in Meizhou.  That is to say, there are only ten coal mines left in all of Guangdong province.  The report also pointed out that at the end of the clean-up, the matter of investments by state enterprise leaders and government cadres and professionals have been cleared out as well.

In addition, pursant to an in-depth investigation by by the work groups in Shaoguan, Qingyuan and Meizhou, there were 52 persons (of which 17 were state enterprise leaders) who are division or sub-division cadres and professionals in the 3 cities with investments in the mines for a total of 5,999,300 yuan in capital.  At the moment, 31 of them have withdrew their capital worth 1,925,300 yuan.  The 4,074,000 yuan from the remaining 21 persons cannot be withdrawn since their mines have been shut down.

According to the provincial safety monitoring bureau, they did not want to have the conflicts escalate quickly.  Therefore, the three coal-producing cities first attempted to understand the basics of the coal mines and then developed plans that unfolded on step at a time.  When the 228 coal mines were sealed, a total number of 130,000 personnel/times were involved and about 40,000 coal mine-related employees were dismissed.

At the same time, the production safety deposits and fees made by the defunct coal mines totally 42,000,000 yuan have been refunded to the mine owners.

On October 8, Shaoguan City offered 26 preferential policies to assist the coal miners to change occupation.  Qingyuan City has offered compensation to each coal-producing town at the rate of 20,000 yuan per year over 3 yars, while also provinding financial aid to the same towns.  Meizhou city has invested capital of 56 million yuan to clean up the mines and to help the mine owners switch to other businesses.

While these procedures were effectively implemented, there had been no mass incidents during the period.