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A ticket to riches for bosses

By Jiang Zhuqing (China Daily)
Updated: 2006-09-27 10:53

The transfer of exploitation rights through public auction not only allows people to see who owns a mine, but also forces investors to map out long-term development plans, said Guo Xuejun, owner of Shenjiao Coal Mine in Xiangning County.

Guo's mine has invested more than 60 million yuan (US$7.5 million) in safety measures, as well as on technological innovations.

Production capacity at Guo's colliery will increase to 450,000 tons from the current 150,000 tons a year, said the boss.

"Since these resources are being purchased by colliery owners, they need to rationalize production factors, and to reduce hidden dangers," said Wei Wanghai, owner of Shiweigou Coal Mine in Liulin County.

Otherwise, our pits will be closed down or will be re-auctioned, said Wei.

"That would lead to tremendous losses and nobody wants to see that happening."

According to a government plan relating to the development of Shanxi's coal industry, the province will merge or close down every colliery whose annual production is less than 90,000 tons by the end of this year.

The Ministry of Land and Resources, the National Development and Reform Commission, and the Ministry of Finance have also decided to expand the auction system to other mining areas in the 11th Five-Year Plan period (2006-10), officials said.

But despite all these attempts to clean up the industry, some people still remain sceptical about coal bosses.

One of the most widely-seen pieces of news last year concerned a rumour that a number of coal bosses from Shanxi Province had bought 20 Hummer jeeps for cash  each costing about 1.5 million yuan (US$185,000)  at a limousine show in Beijing.

No one knows whether the story is true, but the willingness of people to believe the rumour shows what they think of coal mine owners.

"You can find nearly every type of luxury car in Taiyuan, including vehicles made by Mercedes Benz and Ferrari," said Ma Wangying, a city taxi driver. Most of them, he said, were owned by colliery bosses.


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(For more biz stories, please visit Industry Updates)

 
 

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