Appendix 7 Coal Industry Administration in Shanxi Province

47131 Public Disclosure Authorized Economically, socially and environmentally sustainable coal mining sector in China Public Disclosure Authorized Public Disclosure Authorized The World Bank China Coal Information Institute Energy Sector Management Assistance Program Public Disclosure Authorized December, 2008 i Contents CHAPTER 1 INTRODUCTION...........................................................................................................1 CHAPTER 2 OPTIMIZING EXTRACTION .....................................................................................8 2.1 QUANTIFYING COAL RESOURCES AND RECOVERABLE RESERVES ....................................................8 2.2 RESOURCE EXPLOITATION POLICY ................................................................................................11 2.3 COAL RESOURCE POLICY REFORM NEEDS......................................................................................17 2.4 RECOMMENDED POLICIES TO IMPROVE EFFICIENCY OF RESOURCE EXPLOITATION........................17 CHAPTER 3 COAL SUPPLY INFRASTRUCTURE.......................................................................20 3.1 CURRENT STATUS .........................................................................................................................21 3.2 POLICY REFORM NEEDS TO ENHANCE PERFORMANCE OF THE COAL SUPPLY CHAIN.......................32 3.3 RECOMMENDED POLICIES .............................................................................................................33 CHAPTER 4 RESTRUCTURING AND REFORM .........................................................................35 4.1 CURRENT STATUS .........................................................................................................................35 4.2 SECTOR STRUCTURAL REFORM NEEDS ..........................................................................................52 4.3 RECOMMENDED POLICY REFORMS ................................................................................................52 CHAPTER 5 SAFETY, HEALTH AND COMMUNITY IMPACT................................................54 5.1 SAFETY OF MINEWORKERS............................................................................................................54 5.2 HEALTH OF MINEWORKERS...........................................................................................................79 5.3 LABOR AND SOCIAL SECURITY......................................................................................................81 5.4 REFORM NEEDS.............................................................................................................................85 5.5 RECOMMENDATIONS.....................................................................................................................86 CHAPTER 6 ENVIRONMENTAL IMPACT ...................................................................................90 6.1 CURRENT STATUS .........................................................................................................................90 6.2 REFORM NEEDS...........................................................................................................................100 6.3 POLICY RECOMMENDATIONS ......................................................................................................101 CHAPTER 7 REAL COSTS AND STABILIZED PRICES ...........................................................103 7.1 TRUE COST OF PRODUCING COAL ................................................................................................103 7.2 COAL PRICE ................................................................................................................................107 7.3 REFORM NEEDS...........................................................................................................................112 7.4 RECOMMENDATIONS...................................................................................................................113 CHAPTER 8 INSTITUTIONAL AND LEGAL FRAMEWORK AND POLICY .......................116 8.1 CURRENT STATUS .......................................................................................................................116 8.2 REFORM NEEDS...........................................................................................................................117 8.3 REFORM NEEDS...........................................................................................................................122 8.4 RECOMMENDATIONS...................................................................................................................122 CHAPTER 9 CONCLUSIONS .........................................................................................................125 APPENDIX 1 UNDERGROUND COAL GASIFICATION (UCG) ..............................................129 ii APPENDIX 2 EXAMPLE OF SELLING MINING RIGHT BY AUCTION ................................131 APPENDIX 3 SAFETY MANAGEMENT AND CULTURE.........................................................132 APPENDIX 4 ROLE OF MINEWORKER SAFETY INSPECTORS (AFTER FEICKERT 2007) ..............................................................................................................................................................135 APPENDIX 5 COMPARATIVE ENVIRONMENTAL PROTECTION CASE STUDY FROM AUSTRALIA ......................................................................................................................................137 APPENDIX 6 A RECOMMENDED MINE PLANNING APPROACH TO CONTROL SUBSIDENCE IMPACT ...................................................................................................................138 APPENDIX 7 COAL INDUSTRY ADMINISTRATION IN SHANXI PROVINCE ...................140 REFERENCES ...................................................................................................................................144 iii Preface Sustainable development is a comprehensive concept which involves extensive contents. The core of the concept focuses on coordinated development of human being, economy and the society. It emphasizes eternality of development. The development should on one hand satisfy the needs of contemporary people and on the other hand not jeopardize the benefits of the future generations. The ancient Chinese philosophers advocated that “man is an integral part of nature”. They maintained that man should exist harmoniously with the nature, which included the simple thought of sustainable development. The sustainable development of coal mining industry is, under the guidance of scientific development concept, aiming at the goal of overall coordinated development of the employees, coal sector and economy and the society, using advanced technology and scientific administration as a means to improve gradually safety capacity of coal mines and occupational safety and health conditions, to optimize consistently the industrial and product structure, to improve continuously the quality of growth of coal economy, and to take the path of achieving more secured safety, high utilization rate of resources, less environmental pollution and good economic benefits, and the path of sustainable development of coal mining industry. Since the opening up and reform, the demand for coal has increased drastically with fast growth of economy and the society. Coal output rose from 618 Mt in 1978 to 2523 Mt in 2007. As a result of 30 years hard work of employees in coal industry, the coal sector has made profound changes in China. Under such background, it is of important significance and far-reaching influence to make a to-the-depth survey of current status of the coal sector, summarize the achievements obtained since the opening up and reform, analyze the problems that affect the sound development of the industry and explore the path for sustainable development of coal sector. In 2005, the State Council promulgated “Some Opinions on Promoting the Sound Development of the Coal Industry (Guo-Fa No. 18)”. Since then, the coal mining industry entered a completely new stage: the steps of restructuring of coal mining sector were accelerated; large scale conglomerates were rapidly fostered and the production concentration was gradually improved; investment of coal enterprises increased to a great extent; new system for technical innovation that integrated the efforts of enterprises, universities and institutes was set up steadily, the production force was gradually improved and the work safety conditions were evidently improved; “Black coal and Green Mining” was enhanced, circular economic development of coal made some progress; results were obtained in energy conservation and reduced emission; building of harmonious mine areas and promotion of coordinated development of regional economy became a common knowledge and conscientious action of coal sector. In order to meet the requirements of the World Bank, the State Administration of Energy of NDRC organized the relevant departments and research institutes to set up a research project entitled “Economically, Socially and Environmentally Sustainable Coal Mining Sector in China”, and made investigations from 2006 to 2008. The World Bank also iv invited international coal experts to join the research project to embody the leading awareness and international angle of view in the project. The project has made an overall summary of the current status of the coal mining sector and detailed analysis of the existing problems in China in aspects of administration

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