China’s Record Coal Prices Turn Dangerous With Mining Deaths
(Bloomberg) -- Soaring coal prices in China are making mining companies prioritize output ahead of safety, a government agency said amid a spate of deadly accidents.
A massive rescue operation is underway to try to save 21 miners trapped in a flooded underground shaft in Xinjiang, after 12 people died in accidents in Guizhou and Shanxi last week. Companies may have been too eager to produce coal as prices rise, leading to unsafe practices, the National Mine Safety Administration said in a Thursday statement.
The miners represent the human toll of commodity inflation in China, where a booming post-pandemic economy is boosting demand and prices for everything from steel to eggs. Just last week, the National Development and Reform Commission asked coal producers to maximize output to avoid shortages as prices soared.
Thermal coal futures on the Zhengzhou Commodity Exchange closed at a record high of 754.4 yuan a ton ($115) on Thursday, despite the fact that spring is usually a low season for demand. Mining accidents typically prompt safety checks across the industry that can disrupt supply.
High prices are being blamed as one of the reasons for lax safety. The three most recent accidents reflected poor supervision and awareness of regulations, the administration said. Employees at the Xinjiang mine knew of flooding risks, and yet continued to dig at a rate of 9 meters (30 feet) per shift, it said, also citing insufficient expertise among the staff.
While mining accidents are not uncommon in China, the industry has dramatically improved, with annual deaths falling from the thousands to the low hundreds in recent years.
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