Over the last year, the number of accidents occurring at mines in China has increased considerably. Statistics from the government show that last week, at least 6 individuals lost their lives while 47 others remain missing days after an open pit mine in the northern region of Inner Mongolia in China collapsed.
Inner Mongolia is the second largest coal producer in all of China’s 23 provinces.
The incident comes after the National Mine Safety Administration released data showing that the number of mine accidents coincides with the country’s push to increase production of coal.
China, which is the biggest consumer and producer of coal, grew its coal output in 2022 by 9%, reaching 4.5 billion tons. The government urged miners to increase production in an effort to ensure energy security after a nationwide power shortage, which occurred toward the end of 2021, causing domestic prices to quadruple.
Disruption in energy supply following Ukraine’s invasion by Russia and the increasing global prices of coal also prompted China to secure its energy supply.
Until 2021, accidents and deaths at mines in China had been on a steady decline after the country decreased coal burning, shut down excess mining capacity and strengthened safety checks. Last year, however, 168 accidents occurred, an increase from the 91 accidents recorded in 2021. Currently, the death toll has reached a six-year high of 245.
In its 2021 review, the National Mine Safety Administration stated that some mines had ignored safety requirements and placed more emphasis on profits to help meet their production targets. Media in the state reported that the open-pit mine that collapsed last week had been closed for thee years before being reopened in 2021 when the price of coal soared. Following the incident, safety regulators at local mines ordered operations in Inner Mongolia to conduct safety checks.
Experts have also noted that miners in the country are being forced to dig deeper as shallow coal resources in China become depleted, which poses bigger safety risks. Professor Yuan Liang of the Anhui University of Science and Technology stated that every year, the country was mining at a rate of 10 to 25 meters deeper, which left miners facing more complicated technical issues.
Nevertheless, coal production in the country is expected to increase this year as more mines commence operations. China’s major mining hubs, Inner Mongolia and Shanxi, have pledged to increase their output by 2% and 5% respectively this year.
The mine accidents could put the brakes on the operations of several Chinese extractors, and that could give miners elsewhere, such as Arch Resources Inc. (NYSE: ARCH), the edge they need in several key markets.
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