MAC/20: Mines and Communities

A Journey Into The Black Heart Of Shanxi

Published by MAC on 2007-06-29

A Journey into the Black Heart of Shanxi

China Labour Bulletin

29th June 2007

THE northern province of Shanxi is the centre of China’s ever expanding coal industry, and deep in the very heart of Shanxi are the mountainous rural county of Fenxi and the smoke enveloped city of Linfen, officially the most polluted place in China.

Air, land and water pollution are so bad in Fenxi and Linfen that local clinics have seen a dramatic rise in cases of bronchitis, pneumonia and lung cancer over the last decade. And with the privatisation of China’s health system, this has placed an intolerable financial as well as medical burden on the region’s already impoverished population. Very often the only way the people of Fenxi and Linfen can pay their family medical bills is by working in the very industry responsible for the environmental degradation and pollution all around them. With an ample supply of labour, the county has seen a rapid growth in the coal mining industry, especially small unlicensed mines producing poor quality, highly polluting coal in hazardous and all too often life-threatening conditions.

There are nearly a thousand unlicensed mines in Fenxi, which, despite numerous clampdowns, continue to operate covertly with the connivance of local officials.

In April, 2007, Jin Ying, a reporter from Democracy and Legal Times (Minzhu yu Fazhi Shibao), investigated the operation of illegal mines in Fenxi, known locally as “black mines,” and exposed an elaborate network of official corruption and collusion that creates lethal working conditions for miners.

His report, translated and edited here, is important not only because of the story about the mining industry it tells but because it demonstrates the determination of many journalists in China today to report the ugly truth, even at considerable risk to their own safety.

Shanxi Province’s 1,000 unlicensed mines:

Owners collude with officials over “black” pits There are nearly a thousand unlicensed coal mines operating in Fenxi County. These “black” pits are the result of years of unbridled expansion, defying repeated banning orders, with new mines opening after every batch of closures.

One of the many local labourers attracted to this illegal industry was named Liu Wei. In mid-March this year, Liu was working in a “black” pit in Fenxi County‘s Dianping village.

He was crushed to death when the underground roof of the mineshaft he was working in collapsed. Because he was working in a “black” pit, Liu’s death was completely ignored by officialdom until Liu's brother, in desperation, turned to the legal support centre of the Judicial Bureau of Ziyang County. From late March to early April, Yang Pei of the legal support centre repeatedly took members of Liu’s family to Dianping village to seek a settlement.

Finally, with three mine accidents in Linfen this March alone, and a province-wide campaign underway to clean up local mining and end unsafe and uncontrolled extraction, local officials and police launched an investigation. After many setbacks and delays, on April 10, Liu’s family were paid RMB 250,000 in compensation.

In Fenxi County, the local view is that Liu was lucky: his death generated a hefty compensation payment. With nearly 1,000 “black” mines in the area, they say there is no way of knowing who might have died underground, adding that many accident victims get no compensation at all.

In the town of Heping, a former “black” mine boss, who we shall call Yiming (One Light) told Democracy and Legal Times; “Believe it or not, we have over a hundred black mines in this one town here, and the whole county has a thousand. I heard personally from Deputy Mayor Ma, that Heping has altogether 167 unauthorised mines. In fact, it’s a lot more than that. My understanding is that the real number is at least 200.”

Yiming offered to show me around Heping, so on March 19, before dawn, I followed him from Linfen and, after barely two hours, we reached Heping. Entering Zhang village in the south of the town, we saw a procession of trucks loaded with raw, unprocessed coal going down the mountainside. All mine production was supposedly suspended in this county five months earlier, so where was this coal coming from? "It all comes from here,” Yiming said. “No production takes place during daylight hours; they have to wait till five o'clock in the afternoon before they can start getting the coal, and they have to wait until just before daybreak to haul it all away.” He added: “An accident happened at this mine before the Spring Festival and somebody got killed. On the 15th day of the first lunar month [last day of the Spring Festival], there was another accident, in which one person was killed and two injured. In the end the town government paid the family of the deceased on the quiet.”

It is a situation former “black” mine manager Yiming is only too familiar with. "Deep in the mountains of Fenxi County, black mines of all sizes are scattered everywhere,” Yiming went on. “They have shattered many families and brought devastation to our once beautiful mountain scenery.”

That evening, at 10 o'clock, Mr Yiming took me into the mountains, heading this time for a village called Sengnian. When the car reached the smoke veiled Jinyuan coal processing plant, we saw a light shining out from the mountaintop.

“That’s definitely a working black mine,” Yiming said. He suggested we stop the car and continue on foot; “They all have watchmen, and if they see a light approaching, they stop working." We did not dare use a torch, but groped our way along the stony mountain road until we got near the light. We heard the sound of a three-wheeler; it was a mine alright. We got closer. An old winch operator was opening and closing the shaft cover at the sound of a bell. Coal buckets from the mine shaft passed up and down, the three-wheelers ran back and forth like loom shuttles, and the coal heap grew bigger and bigger.

Following the tyre tracks, we continued deeper into the mine area. Before we had gone one kilometre, we saw three more openings. None showed signs of activity, except an occasional, melancholy “dong-dong” from underground. “The men at the top of the shaft have all hidden, but those underground are still working. There has already been some disturbance here, so let’s go somewhere else.” Following Yiming's directions, we went back. When we got to the crossroads at the Jinyuan processing plant, we took a different road up into the mountains. “The black mines are all in the ravines; we go up here and over to find them,” said Yiming, who knows this area very well. Far ahead, we saw a bright array of lights. As we went on, the lights got closer.

A procession of coal-haulage trucks, headlamps burning, was trundling down a twisting mountain road, looking at this distance like a small moving town. Yiming explained: "At this time, you can only see the heavy trucks laden with coal; the empties all come back up in the afternoon. You need wider roads than this; if you use it in both directions, you get jams.” We went towards the trucks, and walked on for another half hour or so until we found another scene of bustling activity. An old man in a cotton-padded overcoat stood on a pile of coal, loudly shouting out instructions: "Drop! Again! Good!" Nearby, a power shovel began to load coal into a carefully positioned truck. He paid no attention to our arrival, as he instructed the truck driver to “go up and compact the load.” I walked up to the man in the overcoat and started to interview him. He was unexpectedly friendly, and began explaining: "This mine is called Tongdi, and it was opened by the former party secretary of Nangoudi village. The quality of the coal is not good—grade11—and one ton will only fetch about RMB 100. But here, you can produce 20-30 tons in one evening." Walking around near the pithead, I was unable to see where the coal was coming from. "Look here," the man in the overcoat said, pointing behind him.

Looking closely, I finally picked out a small hole through which only one person could pass. "Right now, most of the workers have knocked off,” he said. “There are only four men at work, and two small flatbed trucks are taking the coal away. This is one of the smallest shafts around here. If you go further on from here, all the black mines are small - there are probably about 40 or 50 of them."

How did all these “black” mines spread through the mountains and valleys? Zhang Dahai (not his real name), an official at a local branch of the Bureau of State Land and Resources in Fenxi County, gave the following explanation. Zhang, who like Yiming himself once ran a “black” mine, told Democracy and Legal Times: "Two or three years ago, you only had to invest about RMB 20,000 or 30,000 if you wanted to open a small mine in Fenxi. You would dig a shaft up a mountain, bring up a power generator and winching equipment, hire some workers, and then you could start getting coal out. If you wanted to open a black mine, you only really needed two things: a lot of money, and very good connections.”

The first requirement is sufficient capital. You don't need much money to open a small pit, of course, but it certainly isn’t something that anybody can do. The hardware investment runs to several tens of thousands of yuan, and you have get somebody to do the sample-testing. If you pay a lot of money, you will get an expert, and if you pay little, you will get a low-level technician. At this point, the amount that has been invested in human resources and the depth of the sampling and the coal quality are very important. You dig a shaft, bring up the power-generator, winch, scoops and other pithead equipment. Finally, you have to hire some people, and you will need to take on some of them long-term. “Black” mines are not able to produce coal every day, so if you get wind of an official clampdown, you have to stop production, but you cannot just fire workers in the downtime, because you might have to produce on the quiet at any time.

In addition to the hardware, there are also “soft” investments. You have to hand over RMB 20,000 to the village authority, for without their support and protection you cannot open a mine. Then you have to pay regular “tributes” to the Bureau of State Land and Resources and local police. All this will cost you RMB 50,000-60,000 at least. In addition, you need will considerable working capital. “Black” coal mines produce “black” coal, and if you have not got the right paperwork you cannot simply sell it off, you have to transport it to a central storage depot and wait for a big buyer to agree a sale and take it away in large trucks. Coal is often stockpiled, so you need ample working capital otherwise you are out of business.

If you do have the money, there is still one other requirement for opening a “black” coal mine. You need powerful backers. Every “black” mine needs good protectors in every office from the local government to the Public Security Bureau. They can press for leniency after an accident, and they can also pass on information. If an investigation is launched by the higher authorities, a connection on the inside can immediately warn the affected mine owner.

Usually these connections have a major share in a “black” mine enterprise. They do not themselves make investments, do any work, or participate in management. In business terms, all they do is use their special status to provide information to mine owners. From the businessman's point of view, these expenses seem impossibly high, but as Zhang said, “If you want to make money from a black mine, the important thing is to keep officials onboard at every stage. Otherwise, it becomes a bottomless pit.”

Anybody who wants operate a “black” mine long-term has to keep three organizations sweet: the village or township government, the Bureau of State Land and Resources, and the local police. If you hand over RMB 20,000 to the local government, you can open a small mine for business. But that RMB 20,000 is definitely not a one-off payment. Now, all over China, unlicensed mines are being targeted by tough official investigators and hundreds of mines have been closed down or even blown up. If you want to reopen for business, you will be considered as a new operation and will have to hand over another RMB 20,000. The payoffs to the Bureau of State Land and Resources and local police are a bit smaller: usually the top men need to be given between RMB 5,000 and 10,000 for general business information, but these two departments give “black” mine bosses the biggest headaches.

Former “black” mine boss Hao said that his experience is typical. In 2005, he had a “black” mine in Heping. At that time, it was a considerable operation, with daily production of up to 100 tons. But the quality of the coal was not good, and one ton would only fetch RMB 100.

Because he lacked good connections, he could only work the mine for 15 days a month, and only had eight months of regular operation per year.

After production costs, he could only make a profit of RMB 700,000 on annual revenues. Start-up investment was RMB 130,000, palm-greasing officials at every level cost RMB 150,000, RMB 200,000 went into payoffs to connections (Bureau of State Land and Resources cadres), and he had to pay RMB 210,000 in compensation to the family of an employee killed in an accident. Total “procedural costs relating to the accident” were RMB 170,000. “There were also food, drink and entertainment expenses, which cannot really be calculated. After a year, I not only failed to make money, I could not even recoup my investment.”

The State Administration of Coal Mine Safety in Xinzhou in northern Shanxi only has ten employees but they have built themselves a very fine office building, and bought a new car each from money extorted from mine owners. The office building has 34 rooms. The ten employees occupy 14 of them, while 20 stand empty. The average room size is 60 square metres, and each room has its own sleeping and washing area.

However, officials at the State Administration of Coal Mine Safety do not even consider themselves responsible for safety at “black” mines, as Democracy and Legal Times discovered during an interview at the Fenxi County branch.

“We at State Administration of Coal Mine Safety only supervise licensed mines; unauthorised mines fall under the remit of government and the Bureau of State Land and Resources,” an official said. Asked about the situation in which “black” mines continue secret, uncontrolled coal extraction, while legal mines are “closed down for reorganisation purposes,” a source at State Administration of Coal Mine Safety for Fenxi County told the paper the following:

Fenxi County has altogether 22 authorised mines. Although the quality of the coal is not that good, they are still tolerably profitable. At the end of September 2006, a directive came down ordering all mines to cease production, restructure and get re-licensed for 2007. But now, after at least five months, not one mine has acquired a new license, and production has remained suspended at all of them. Recently, I found out, 12 mines in the county had completed the first round of legal clearance, and after getting written approval had already begun basic construction. The State Administration of Coal Mine Safety has placed inspectors at each licensed mine to check that production is carried out correctly. But “black” mines do not come under the remit of State Administration of Coal Mine Safety, and within the county are only checked by “unannounced” inspections. Can that really hurt or root out “black” mine operations?

Local people are sceptical.

On April 14, word spread across Fenxi County that the authorities intended to carry out unannounced inspections by the Bureau of State Land and Resources and Public Security Bureau at “black” mines. It was supposed to be a secret action but in the affected areas everybody was talking about it and it was hard not to suspect the news had been leaked. At seven o'clock in the evening on April 14, members of the public security forces charged with “smashing the black mines” stood at the entrance of the Bureau of State Land and Resources offices of Fenxi County awaiting orders. After a quick meal, at least a dozen off-road vehicles and police cars set off in a convoy, creating an impressive spectacle.

There was nothing very secret about this procession. "The black mines with connections have already stopped production; they are only targeting the small illegal mines that have no connections," remarked bystanders in a crowd of onlookers, chatting dismissively about what was by now a familiar sight.

It is understood that this clampdown was led by Fenxi County Deputy Party Secretary Wang and County Head Ma. The clampdown had two official purposes: to investigate the “black” mines, and to check the papers of coal-trucks they met along the road. A reporter from a local TV station turned up to record footage and asked if he could do some interviews. Wang and Ma replied pointedly: “At the moment our society lacks sufficient harmony, so for safety reasons we do not agree to a reporter coming along.” The reporter was then told, in menacing tones, “Did you know that in Datong, Shanxi, a reporter was beaten to death?”

On the evening of April 14, there were hardly any coal trucks on the roads of Fenxi County. Now and then a few passed by, stopping and starting, drivers using their mobile phones to dodge the convoy of “black” mine busters. Late that night, I returned to Qiangoudi village outside Yongan. All the “black” mines were down. In the pitch dark, all the small mines had sheets of plastic draped over their buildings.

They were waiting for the danger to pass, before resuming work. On the way back, four three-wheelers passed by in a line. Wearing their safety helmets and lamps, the miners told me that 78 men had gone underground that day, and after just four or five trips they had been told to stop work and go home.

Sengnian municipal party secretary, Wu Jianming, has frankly admittedly to the media that his government can do nothing. "The state does not have strong compulsory measures against unsafe, uncontrolled coal mining. In most cases, people are detained and then the sentence is not carried out.” Asked about secret mining within the boundaries of Sengnian, Wu said, "Yes, it certainly exists, I recognise that. The village and town governments have no means of dealing with black mines. It is pure luck that accidents do not happen. But they are inevitable, so far we have been very lucky."

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