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Exporters to gain from Chinese safety shutdowns

THE death toll from the coal mine gas explosion in central China's Henan Province has reached 54,...

Blair Price
Exporters to gain from Chinese safety shutdowns

According to state-owned news service Xinhua, 25 miners remained trapped underground one week after the accident on September 8.

On the same day, an underground gold mine in the same province had a cave-in after an electrical fire, killing 13 workers.

Xinhua reported that 13 officials and mine managers were either arrested, sacked or suspended from their posts as a result of the accidents.

Provincial government authorities have reportedly shut down all 157 mine shafts in Pingdingshan district as a result of the coal mine disaster, echoing the small coal mine closures that followed the Tunlan colliery gas explosion in northern Shanxi Province in February, when 78 people were killed and 114 were injured.

A Chinese analyst from Everbright Securities told Bloomberg that the new wave of mine closures could cut 3Mt of coking coal supply a month, about 5% of the country’s monthly consumption, and could lift prices in China by 8.2%.

Safety-related mine shutdowns, along with cheaper freight rates and infrastructure constraints in the country, have led to China being the second-largest importer of coking coal this year, after Japan.

BHP Billiton has said it expects China to import a total of 30Mt of metallurgical coal in the 2009 calendar year.

Macquarie analysts forecast the total to be 29Mt and expected China to import less in 2010 at 20Mt, though this was before the shutdowns in Henan Province.

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