China: Safety concerns threaten Shanxi's 2024 coal output targets

Mysteel Global: Northern China's Shanxi, the country's top coal-producing province, is grappling with mounting safety pressures due to frequent accidents in its coal mines which could jeopardise its ability to meet its 2024 production target.

On 1 August, the National Mine Safety Administration (NMSA) summoned officials from Shuozhou city, a major coal-mining hub in northern Shanxi, following a series of coal mine accidents. In June-July, five accidents occurred in Shuozhou, leading to six fatalities, according to China Coal News, a state-owned industry portal under NMSA.

Shuozhou has reported the highest number of coal mining accidents in Shanxi so far this year, with its death toll ranking second highest in the province. "Such frequent accidents reveal significant negligence in supervision by the local government," the media quoted the NMSA as saying.

As of end-2023, Shuozhou hosted 65 coal mines with a combined capacity of 191.9 million tonnes (mnt)/year, according to data from the local emergency bureau. Of these, ten are classified as Level-A mines with "premium" safety conditions, 39 as Level-B with "fine" safety conditions, another ten as Level-C with "weak" conditions, and six as Level-D, indicating production has long been suspended though in theory mining could be restarted.

During 2023, Shuozhou actually produced 233.46 mnt of raw coal, way above estimated capacity and a 7.3% increase from the previous year, official statistics showed. This output represented 17% of Shanxi's total coal production last year. For this year, the city aimed to stabilise production at around 200 mnt, according to the 2024 municipal government report.

Shuozhou's challenges are reflective of broader safety concerns across Shanxi. The province aims to produce around 1.3 billion tonnes (bnt) of raw coal this year, but progress on meeting the goal has fallen behind schedule. In January-June, Shanxi had produced 587.89 mnt or 45.2% of the target, official statistics showed.

Initially, Shanxi tightened measures earlier this year for safety reasons to address overproduction but later shifted focus back to increasing output due to concerns about supply shortages and provincial financial pressures. As a result, safety incidents are on the rise again, Mysteel Global noted.

If the provincial government takes stricter safety measures again under pressure from central government authorities, meeting the annual production target may become increasingly difficult, Mysteel Global suggested.

This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.