At least 28 people were killed after explosions rang out in a coal mine in Sichuan province, China yesterday.
The explosion occurred in coal mines Taozigou, Lu Zhou City, Sichuan Province. More than 100 workers are working in the pit when the explosion sounded, Xinhua reported.
Rescuers pulled 81 people out of the tunnel. 16 of them were injured. This is a coal mine explosion in China Monday week. On 10/5, gas explosion in a coal mine in Guizhou Province that killed 12 workers.
Mining accidents occur frequently in China despite efforts to strengthen the government's safety. Most accidents occur because people do not adhere to the rules of safety.
In April, a coal mine explosion in Jilin province that killed 18 people and wounded 12. More than 1,300 people died in mining accidents in China in 2012.
As a result, the coal mine where the accident happened is ordered to be shut down permanently.
Mean while, all coal mines in Sichuang Province were ordered to suspend all productions for a thorough safety check and inspection. Specific official written approval is required before any mine is allowed to resume production.
Meanwhile, more than HALF of coal mines in Erdos have been shut down voluntarily due to un-profitable coal prices. Erdos is responsible for 1/6 of CHina's coal production. What's un-profitable coal price in China? $100/ton. That's extremely profitable price for any US coal mines, even after calculating all the costs shipping to China. Likewise in the rest of China, many coal mines are shut down. This will cut supply and turn around the global coal market quickly.
One big difference is in the USA, even as coal mines are un-profitable, they don't shut the whole mine down, they only curtail a calculated amount of production, 10% to 15% thus far. They don't cut worker salaries. They don't massively lay off workers and completely shut the whole mines. Thus even as coal producers did curtail production, the turn around takes longer.
But in China, it is a totally lawless state. Coal producers can shut down the entire mine as they see fit and as they see they are not making a profit. They can massively lay off workers without any compensation package. They can cut worker salaries any way they see fit and if any worker is unhappy they will just let him go.Such lawlessness is unthinkable in America. But precise because of that, since now Chinese mines are now massively shut, the supply/demand turn around will be swift. Mean while, Chinese coal consumers will just massively import more foreign coal.
Which is extremely bullish for international and US coal market.