China plans to spend 3 billion yuan (US$362 million) this year on increased safety measures in coal mines to reduce the number of workers killed in accidents.
The government will spend the money monitoring air quality and poisonous gas levels in mines, increasing the number of safety inspectors, Li Yizhong (李毅中), minister of State Administration of Work Safety, said yesterday. The maximum fine for safety violations, currently 200,000 yuan, may be raised, he said.
China, the world's biggest coal producer, has one of the worst mine-safety records because unsafe pits have been kept open to meet fuel demand. Record profits for coal companies and initial share sales worth US$4 billion by Shenhua Coal Group (
"The 3 billion yuan figure is just to jump start investment in safer production," Li told reporters at a briefing in Beijing. "Coal companies are making record profits and we hope they can boost investment and raise the figure to as much as 16 billion yuan a year."
China's death toll from coal mining accidents in the first quarter rose 21 percent to 1,113, the work safety administration said earlier yesterday. The number of accidents fell 7.4 percent from a year earlier to 503, the agency said in a statement.
Chinese coal companies are required to spend between 2 yuan and 10 yuan for every tonne of coal produced on measures to ensure safe production, including installing air vents in mines to reduce a build-up of methane, Li said.
Aggregate profit at 32 of China's state-owned coal producers soared 190 percent last year, as the fastest economic growth in eight years spurred demand for fuel to run power generators and steel mills. The companies' profit rose to 20.5 billion yuan as higher prices boosted sales, the State-owned Assets Supervision and Administration Commission said on Feb. 3.
Demand for coal in China, which burns the fuel for two-thirds of its energy needs, surged last year as the economy expanded 9.5 percent.
The nation's coal consumption may climb 11 percent this year, J.P. Morgan Chase & Co said on Feb. 7.
China's government may accelerate plans by Shenhua and China National Coal to hold overseas share sales that will raise funds to boost production and spending on the latest mining techniques, Li said.
"Shenhua is preparing for a listing," he said. "Although China National Coal has yet to submit plans for a listing, I hope they will proceed with their proposal." The companies may use some of the funds raised to acquire smaller mines to expand output and to raise management standards in the coal industry, Li said. The government may encourage more foreign investment in coal companies to benefit from mining technology from abroad and raise production standards, he said.
China National Coal hired China International Capital Corp (
The Beijing-based company, China's second-largest coal producer, wants to raise funds as soon as this year to expand production, the people said, asking not to be identified.
Shenhua, China's biggest coal producer, plans to raise US$3 billion in its initial share offer.
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