A ticket to riches for coal mine bosses
By Jiang Zhuqing (China Daily)
Updated: 2006-09-27 07:01

Shanxi is China's biggest coal producing province, something that has turned many colliery owners into the area's nouveaux riche.

With a taste for high living, including fancy cars and big villas, these bosses seem to represent everything that is good and bad about China's economic development.

It would be easy for most Shanxi coal bosses to buy several houses in one go, said Jin Weidong, who owns a colliery in Xiaoyi, a city in Shanxi. His mine produces 150,000 tons of coal annually.

Even owners of small mines can earn 4-5 million yuan (US$500,000 -625,000) a year. Bosses of bigger mines can earn as much as 100 million yuan (US$12.5 million) a year, he claimed.

Houses are a must-buy for many of them.

"There are two reasons to purchase houses in big cities such as Shanghai and Beijing," said Jin.

"One is to buy as an investment, the other is to seek a better place for our children to be educated."

Once one buys a property in a real estate project, others often follow suit without hesitation, said Jin.

Coal bosses, even though most of them only received a primary or middle school education, have become synonymous with millionaires in Shanxi Province.

Thousands of coal bosses, including those from other regions with large coal deposits, have got on the list of the wealthiest in their hometown.

Of 31 men who qualified to be placed on China's 2005 energy rich list, 11 were engaged in the coal industry, according to Briton Rupert Hoogewerf, who compiled the list.

The richest is Zhang Xinming, chairman of Jinye Coal Group, also in Shanxi Province.

He was seventh on the list, with a personal wealth of an estimated 1 billion yuan (US$125 million), a figure that cannot be verified via income tax bureaux.

Most of the coal bosses began to make their fortunes in 2002, when the price of coal increased rapidly because of huge domestic energy demand.

Oil prices have also risen steeply in recent years, meaning many firms have switched to coal, pushing up demand further.

Since then, many private coal mines, as well as some State-owned mines, have increased their production capacities.

Some collieries have increased production by 10 times the permitted capacity, experts said.

Statistics indicate China's total coal output increased from 1.4 billion tons in 2003 to 2.1 billion tons in 2005.

At the same time, coal bosses have come under the spotlight for their alleged apathy towards frequent coal mine accidents and indifference to safety.

Colliery accidents killed more than 2,900 miners throughout the nation in the first eight months of this year, statistics from the State Administration of Work Safety show.

Many people complain it is far cheaper to compensate a dead miner's family than invest in safety equipment.

In 2004 Shanxi Province said compensation should be no less than 200,000 yuan (US$25,000) for each miner killed.