Accident cash funds set up by coal mines
By Fu Jing (China Daily)
Updated: 2005-12-27 06:08

Coal mine owners are being ordered to open safety reserve accounts from the start of next year to deal with future mining accidents.

As part of an emergency package to curb a rise in incidents, the State Administration of Work Safety (SAWS) yesterday required site bosses to deposit sums of risk reserves ranging from 600,000 (US$73,000) to 6 million yuan (US$730,000). The money will be used in rescue efforts and compensation for miners' families.

"The risk reserves can guarantee we have enough capital to save miners and compensate family members," said the administration spokesman. "And also we are alarming mine owners with high prices if they ignore safety."

It follows a spate of accidents in recent months.

On Friday it was announced the central government had given two provincial deputy governors disciplinary penalties and prosecuted 96 officials blamed for six high-profile coal mine accidents that killed a total of 528 people over the past 13 months.

This year, compensation levels per death in mining accidents were increased to a minimum of 200,000 yuan (US$25,000), from previous averages of 10,000 (US$1,250) or 20,000 yuan (US$2,500).

The spokesman said the amount of the reserves will be set by safety watchdogs in line with production capacity of the mines.

Owners will have to top up the account gap within one month if accidents happen and the risk capital is partly or totally used.

Miners said the new regulations would help to improve safety awareness of mine owners but were afraid that bosses will transfer the financial burden down to them.

Some mines have already implemented the practice of depositing risk reserves. However, many miners have seen their wages deducted by a certain percentage every month to cover the fees, despite the government saying the money should be provided by mining companies' own funds.

Workers at the Daxing Coal Mine of Xingning in Guangdong Province are among those who have had to carry the burden of the deposits.

The scheme was introduced after the mine was flooded on August 7 when a total of 127 miners were working underground. Only four miners escaped.

"Every month, 5 per cent of our wages have been taken out to make up for the risk reserves," an earlier report cited a miner surnamed Yang as saying. "All the miners in the region around us, as far as I know, suffered from the practice."

Yang said in some mines, even 7 per cent of the miners' wage has been deducted.

A SAWS official, who asked not to be named, told China Daily that tough measures will be taken to punish mine owners if they continuously bend the rules. "Maybe their mines will soon be added on the government's long list of closed mines," said the official.

Over the weekend, SAWS made public the names of more than 1,000 mines, which could be closed off because of their insufficient safety guarantees.

"We've met unprecedented safety pressures and all in all, all the iron-handed measures should be implemented thoroughly," said SAWS minister Li Yizhong.

This year saw four coal mine disasters that killed more than 100 miners each.

(China Daily 12/27/2005 page3)