Killing coalfields

The worst coalmine accident in China since 1942, when 1,550 miners died in an explosion in Japanese-occupied Manchuria, has sparked a bureaucratic explosion that experts say will transform the industry. After 214 miners perished in the February 14 blast at the Sunjiawan Coal Mine in northeastern Liaoning province, Premier Wen Jiabao sacked a minister, and announced a new mine-safety tax and a massive program of immediate spending on safety and clean-coal technology – much of it to come from offshore suppliers.

After the accident at one of the supposedly larger and safer state-owned mines, Liaoning Vice-Governor Liu Guoqiang was fired as investigations got under way. Days later, a RMB3bn (US$361m) program to fund "safety technologies upgrades" was announced. To pay for it, a fresh tax of US$0.24-US$1.20 per ton, and another to offset environmental damage, was added.

While there has been little evidence of an immediate acceleration in the acquisition of clean-coal technology, significant progress has been made over the past year. Some form of it is already in place at 150 of the 300 larger state-owned mines, and Chinese officials are supposedly scouring the earth for methods to make coalmines safer.

Ironically, China continues to focus attention on the bigger, safer state mines rather than the many illegal coalmines that kill many more miners. While safety is the problem, Beijing must also face the fact that small township village enterprise (TVE) mines – the biggest killers – also deliver nearly half of China's coal. Chronic unemployment, threatening social stability, also tempers much official decision-making regarding drastic reforms.

Further clouding the issue, the central government, which last year said all illegal mines would be finally shut down by November, contends that 70% of mining fatalities occurred in illegal mines – which might suggest 2005 will bring a massive reduction in coalmine deaths.

But the loudly proclaimed schemes of recent years to shut down even small TVE mines are perpetually stalled, according to a study by the International Coal Agency's Clean Coal Centre, an OECD unit. That is because China is not only the largest coal producer in the world, it also burns the most coal as the country keeps growing at near double-digit, pushing up electricity demand. And as coal produces 90% of electric power, shutting down 46% of coal production is not on.

Small mines cheaper
"That 46% comes from 82,000 small mines, totaling 615m tonnes," reported Andrew J. Minchener, senior associate and consultant who wrote the July report for the OECD. "These small mines produce cheaply and leave larger state-owned mines at a cost disadvantage," Minchener said.

The Sunjiawan colliery blast in February happened at one of the bigger, better and supposedly safer mines, as did another last November in Shanxi province, which took the lives of 166. The big death tolls at large mines, in fact, represent only a fraction of overall coalmining fatalities – but they grab the big headlines. The dull carnage emanating from the far more numerous TVE mines does not, because their fatalities come in a constant flow in smaller increments.

Overall mine safety progress has been made in recent years and clean coal technology projects involving foreign suppliers are under way. Chinese coalmine fatalities fell 6% last year with 6,027 having perished in methane explosions and coal dust fires in 3,639 colliery accidents. "The figure is shocking," admits Huang Shengchu, president of the China Coal Information Institute, clearly dissatisfied with the paltry reduction in the appalling death toll. But Huang also remarked that the sacking of the provincial vice governor and new drastic measures was "unprecedented" and signaled a new weight Beijing had assigned to the problem.

And Minchener sensed some progress, too, in Shanxi province. "Recently, the Jincheng Coal Group proposed a [methane drainage and electric conversion] project that addresses these issues and it has been reported that they will be offered support from the Asian Development Bank, World Bank and the Japan Bank for International Cooperation."

Since July, the Jincheng Coal Group project has been financed by a US$100m facility from the Asian Development Bank. "We're funded, approved, and ready for bidders," says Scott Stevens, vice president of Arlington, Virginia-based Advanced Technologies, a partner in the Jincheng Project joint venture. Stevens says he expects he will soon be weighing bids for pumping equipment, drills and bits from offshore firms such as Caterpillar, Jenbacker and Joy Drilling.

He sees profit in methane gas recovery at the Jincheng Sihe Mine, which he reckons will produce 120 megawatts. Methane recovery, he contends, is an industry in itself. "Ten percent of natural gas in the US is methane," he says.

Foreign technology
Foreign companies are now staking claims to supply hardware and software to cut the death toll – and transform the methane liability into a natural gas asset for electric power generation. Vendors of equipment are springing up from the US, Japan and Europe.

Chinese coalmining experts are also searching offshore mines to examine state-of- the-art methods of methane drainage and recovery. Last year, they called on the BHP Billiton's Appin Tower Mine in New South Wales. As Gas Utilization Manager Bill Vatovec tells it, they were spellbound as they learned how the company coped at Appin Tower Mine, which has been called the "gassiest coalmine in the world". Its methane drainage system converts the gas into 98 megawatts of power – which would be enough electricity to operate the mine itself, if it weren't for an arrangement to sell it to the local power grid instead.

While declining to disclose what transpired between Chinese officials and his company, Vatovec leaves little doubt about the merit of BHP's technology: "The big driver of our drainage and recovery system is safety. We have risks of catastrophic accidents and I would recommend this system to anyone who shares this concern."

Ray Noon, a control officer at the mine, explains how 24-inch- diameter pipes are laced through the mine – each connected at 1,000m intervals to drills that can move in different horizontal and vertical directions fishing for gas under the coalface. When gas deposits are found, the methane is sucked through the pipes to a surface burner, which converts it into electricity.

Advanced Technologies' Stevens, working in the big Jincheng Coal Group Sihe Mine in Shanxi, says his system is similar, but contends his mine delivers 120 megawatts of power versus BHP's 98 megawatts.

Another hopeful clean-coal player in Shanxi is Axel Preusse, chairman of the Germany's 40-firm Grubengas Group. Preusse promotes a gas recovery converter that does much the same as the others, but his device also neutralizes carbon dioxide, a greenhouse gas and co-conspirator in global warming. At his base in Aachen, Westphalia, Preusse's green machine delivers electricity to the local power grid.

Preusse sees global warming as a deepening theme in coming years. "There is not only the economic aspect," he says, "but political interests too. With the Kyoto protocol, interest from investors will grow. This may not be too visible now, but I believe concepts are nearing the phase of being put into action."

The bureaucratic dimension in global pollution management, not only in coal mining but also in coal-fired power plants, is rising as an increasingly important factor. "Investors have begun to include assumed profits through emission certificates in their calculations," Dr Preusse says. "This seems to be the first step to [realizing] benefits from the Kyoto mechanisms. By calculating not only the value of projects themselves, but also adding a possible emission trade, the break-even point can be lowered."

Clean coal is coming, agrees Robert Broadfoot, managing director of the Hong Kong-based Political and Economic Risk Consultancy. But he adds national security to the mix of health and safety motivations that drive the Chinese campaign to improve its coal sector. China, he says, knows it must quickly reduce rising dependence on foreign oil, which leaves it vulnerable to external pressure.

"China will be at the forefront of clean coal technology in 20 years," says Broadfoot. "Seventy percent of the coal is wasted in transport, and through inefficient burning. That has got to stop."