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China Closes Largest Failing Strip Mine

China closed its largest financially struggling coal strip mine Wednesday, a move regarded as a firm step towards snuffing out the country's dying state-owned mines.
The state-owned Haizhou Coal Mine in Fuxin, a city in northeast China's Liaoning Province, was Asia's largest mine in the 1950s. It has now become the largest coal mine to announce bankruptcy since China began to close failing mines in 1999.
Experts said that the government has closed more and more large, struggling mines to show its determination to snuff out the "dying" part of China's strong economy.
"It is a historic moment and also a tragic moment," said Sun Hongmao, head of the Haizhou Colliery after hearing the bankruptcy announcement made by a local court.
As one of the largest coal mines built after the People's Republic of China was founded in 1949, the Haizhou Colliery boasts a glorious past.  By 2003, Haizhou had contributed 210 million tons of coal and 3.38 billion yuan (US$407 million) in profits since it opened in 1953, said Sun.
But after years of over-exploitation, however, the mine currently has reserves of only 870,000 tons.
In fact, there are more than 400 coal mines in China that have experienced or will experience the same fate as Haizhou. Finding away out for the mine companies has become a challenge for the Chinese government.
Declaring bankruptcy is the most popular way to solve the problem, but compensating former employees is costly.
For example, the government will pay an average of 20,000 yuan (US$2,410) to each of Haizhou's 100,000 employees as compensation. The mine is also responsible for finding all former workers a new job.
"The whole cost is around 860 million yuan (US$103.6 million)," said Li Qiang.
Fortunately, Haizhou also found a new way out for its miners by giving them another chance to work in a coal mine.
The Fuxin Coal Mining Group, Haizhou's boss, has signed a cooperation agreement with an opencast coal mine in north China's Inner Mongolia Autonomous Region, where Fuxin will be responsible for the exploitation of a coal field with the reserves of 2 billion tons.
"Our 2,000 workers will be the first group to work in the mine," said Zhang Xiaojiang, director of the office under the group, which is in charge of bankruptcy.
"Comparing to finding a completely new job that I have never done before, I would rather to do my own profession," said a miner of Haizhou, who just gave his surname as Du.
"To find new resources is also a good way out for a dying coal mine, however, considering a long-term development, the earlier is the better," said Guo Yuchen, director of the planning office under the Liaoning Provincial Mining Industry Administration. 

(Xinhua News Agency June 9, 2005)

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