The Heat Is Online

China Sees Coal as Key to Development

China's dependence on dangerous coal keeps growing, Oct. 7, 2004

SANDAOLING, China - Dong Ye lights a cigarette and doesn't give a second thought to fate - his or his country's - as he steps off a dump truck onto the dirt road that winds into the Sandaoling coal quarry.

He has spent his 15 years of adulthood working in one of China's grittiest and most dangerous industries and coal mining is all he knows.

"Our parents' generation and grandparents' generation worked here," said the lanky driver as a pair of colleagues nodded in agreement under the punishing sun. "Our wives work here too."

The fate of the sleepy mining town of Sandaoling - and of the entire country and its booming economy - is tied to coal.

"The economic development is going to be extremely significant," said Graham Wailes of AME Mineral Economics based in Sydney. "It is going to need large loads of energy."

In China, that means large loads of coal.

Miners chipping chunks of coal for the past 46 years have carved a wide gash into the earth with huge black terraces that run for hundreds of metres.

Coal is the lifeblood of China, and when the mine was founded in 1958 coal sparked life in Sandaoling, in the middle of the desert in the western region of Xinjiang.

The country is already the world's top producer of coal and is expected to pull 1.9 billion tonnes from the ground this year, up 10 percent from last year. In 2010, it aims to raise that to 2.2 billion tonnes.

Furthermore, three-quarters of China's 400,000 megawatts of installed power capacity, the world's second-largest after the United States, are fired by the jet black fossil fuel.

This leads to worries about increased air pollution and the release of ever-larger amounts of the greenhouse gas carbon dioxide.

Coal remains near the top of the list of industries critical to maintaining China's robust economic expansion. Oil is also up there, increasingly important as the economy booms, and the country is working hard to diversify its sources of oil.

And yet, for such an important industry, coal is a mess.


China's coal industry, perhaps above all else, is inefficient, particularly in transport.

Roads and railways can not keep up with demand. Industry officials say the overloaded train system can only transport 40 percent of the coal that needs to be shipped.

A coal squeeze, exacerbated by the transport problem, has threatened normal operation of thermal power plants and contributed to the worst electricity crunch in 20 years.

Furthermore, rocks and dirt account for perhaps 20 percent of the weight of what gets trucked out of Chinese coal mines, estimated Nomura analyst Russel Young in Hong Kong.

Part of the problem is that many, if not most, of the country's 30,000 mines are tiny and tough to regulate.

That fact also gives China's coal mining industry its most tragic, yet defining feature - its carnage.

In the first seven months of the year, 2,993 people died in explosions, floods and other mine disasters, the State Administration of Coal Mine Safety said. China's average is roughly four deaths per million tonnes of coal produced.

State-owned Sandaoling averages about 0.3 deaths per million tonnes of coal and it has never experienced a disaster because it invests 5 million yuan ($604,200) a year in safety measures to protect its thousands of employees, the mine's head said.

Not all mines are so fortunate. Government campaign after campaign to lower the number of deaths has had little effect.

With vast swathes of China left in the dust of the economic boom, jobs are hard to come by and miners have little choice.

"China's too big a place to pick and choose your work, and quit one job to find another," said Dong. "If you've got 10 people in your family, how are you going to feed them?"

Asked if he would ever work in an underground coal pit, Dong, who earns about 1,000 yuan ($120) per month as a trucker, did not hesitate to say yes, explaining that the pay is better.


But coal is here to stay, because it is abundant and the alternatives are generally more expensive. The price of oil, which is China's second largest source of energy, is hovering around all-time highs of $50 a barrel.

"They are trying to force more utilisation of gas, trying to eat into reducing the coal consumption in China, or at least diversifying away from it, more nuclear power," Young said.

But he added: "China's got so much coal reserves that obviously it can't move too far away from coal."

No one in Sandaoling is moving away from coal any time soon either.

Li Chunsheng, head of Sandaoling, formally called Xinjiang Hami Coal Industry (Group) Co., said 60 million tonnes had been produced at the mine already and it is expanding rapidly.

It produced nearly four million tonnes last year and plans to be able to produce 10 million tonnes a year by the end of the state-directed 11th Five Year Plan, in 2010.

Li said the mines and quarry at Sandaoling still had 40 to 50 years to go before they ran dry.

After that, fate will decide the future.

"The state puts great emphasis on coal and the regional government has shown great care for us," he said. "And they will gradually equip us with a new base for coal and energy."