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Chinese Agency Says 497 Officials Retract Stakes From Coal Mines

Posted on: Monday, 26 September 2005, 12:00 CDT

Text of report in English by official Chinese news agency Xinhua (New China News Agency)

Beijing, 26 September: The state work safety watchdog announced here Monday [26 September] that 497 officials have withdrawn their investment in coal mines amid a nationwide crackdown.

Li Yizhong, director of the National Bureau of Production Safety Supervision and Administration, said that the figures represent only part of the campaign outcome based on the reports from nine provinces including Guizhou, Hunan and Hebei.

A final report of nationwide data will be released by mid- October, said Li.

China issued a circular on 30 August requiring all officials who invested in coal mines to retract stakes, setting 22 September as the deadline.

The circular said if the officials refuse to withdraw the illegal investment, they will be removed from their post.

Among the 497 officials who have followed the state instruction, 325 are government officials and 172 are company officials in state- owned enterprises (SOEs), said Li.

Collusion between mine owners and officials are to blame for the frequent coal mine accidents in China, said industry insiders. Some coal mines are owned, or partly-owned by local officials. Therefore, these mines always escape from inspection and become black holes devouring miner's lives.

In the Daxing coal mine disaster, which claimed 123 lives in south China last month, the mine owners turned out to be the delegates to the local people's congress.

Another similar case is the Xinfu coal mine accident in northeast China, which killed 18. The owners were found to be the deputy director of the local work safety administration.

The fat profits in China's coal mine industry have created some overnight millionaires in the past year. Illegal mining is especially favoured by those who risk everything for money.

Coal mine owners in north China's Shanxi Province said that everybody knows the coal industry is profitable, but only those who have connections with local officials can make money.

Some government officials hold stakes in the local small coal mines. But they are not technically investors. Their power drives mine owners to give them free shares, said a mine owner in north China's Inner Mongolia Autonomous Region.

Li said the agency will crack up on the officials either investing in the coal mines or holding free stakes to get illegal gains.

Since the beginning of this year, China has enacted a series of measures to combat the corruption behind mine accidents.

A recent related development is that the country issued a set of special regulations in early September to prevent coal mine accidents, highlighting the crackdown on corruption.

Source: BBC Monitoring Asia Pacific

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