Coal mines in China ordered to conduct safety check after fatal accident

Coal mines in several Chinese major mining regions have been urgently ordered by local authorities to carry out safety inspections after a lethal accident on Wednesday that killed at least two people and left more than 53 missing.

The collapse of an open-pit mine in Inner Mongolia with annual capacity of 900,000 tonnes occurred at a sensitive time, amid a push to boost local coal supply and 10 days ahead of the annual meeting of parliament.

Governments in several regions, such as Inner Mongolia, Shanxi and Shaanxi, have ordered coal miners, especially open-pit mines, to immediately conduct safety checks and local authorities to carry out inspections.

"We must severely crack down on all kinds of violation of laws and regulations, giving them punishment or shutting them down to correct the problems," Dongsheng government in Inner Mongolia said in a statement on Thursday. Beijing has been urging coal mines to ramp up output since late 2021 to bolster supply and dampen soaring energy prices. It is estimated to have approved 260 million tonnes of new coal mining capacity in 2022 and reopened dozens of mothballed mines, raising total capacity to 5.05 billion tonnes.

The exact cause of the accident on Wednesday is not clear. Chinese state broadcaster CCTV reported on Thursday the collapsed mine in Inner Mongolia was originally an underground mine that closed and then reopened in 2021 as an open pit mine.

China's coal mines are among the world's deadliest, largely due to poor safety standards and problems with over-production.

Market participants expect a range of strict safety checks to take place in China over the coming weeks as the national parliament is set to meet from March 5.

"The accident occurred just as the major national event approaches, which will trigger a large scale of safety inspections across the country and to some extend reduce short-term coal supply," analysts from Guojin Futures said in a note.

However as coal is crucial to energy security and economic activity, they said supply is unlikely to be cut sharply.

Prices for thermal coal with heating value at 5,500 kilocalories jumped to 1,100 yuan ($159.84) a tonne in northern Chinese ports on Wednesday, up from a year-low of 980 yuan a tonne last week.

The most-traded Dalian coking coal futures surged nearly 6 per cent on Thursday to 2,085 yuan a tonne, the highest since mid-June.