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Illegal mines continue to operate

World Coal,

Over a quarter of the illegally constructed coal mines that were ordered to suspend operation and construction are still producing coal, according to China Coal Resource, with annual capacity reaching 235 million t.

A total of 146 coal mines were ordered to suspend operations – but 38 of these continue to produce coal with 28 of these owned by large state-run firms, including Shenhua, China Coal Group, Shandong Energy and Yankuang Group.

These 28 mines account for 205 million tpy of production, China Coal Resource said, or 87% of the total coal produced the 38 illegally operating mines.

The issue of illegal coal production in China is problematic – increasingly so given current oversupply of coal in the Chinese market. The Chinese government has committed to removing 1 billion t of production capacity by 2020.

But efforts to close coal mines have been marked by industrial unrest, leading some analysts to question the viability of the government’s plans.

“Both government efforts at consolidation and company efforts to reduce production costs will be affected by rising tensions among workers,” said BMI Research in a recent note.

Worker demonstrations doubled in China in 2015 to 2774, according to figures from the Hong Kong-based China Labour Bulletin, while December 2015 saw a monthly record set.

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