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Tough time for towns where mines run dry
Efforts to find new pillar industries face a multitude of challenges, say experts. Hu Yinan reports from Shandong.

Thunderous explosions rock Bian Shuwen's home every afternoon. As each blast violently rattles his windows for seconds at a time, he becomes that little bit more convinced these tremors will ultimately cause his house to sink into the ground.

But like millions of others across China who live beside underground and open cast mines, the experience is bittersweet for Bian. Although he knows the iron ore pits in his native Nanwudong village, Zibo in Shandong province, have a severe environmental impact, he also recognizes they provide vital and, sometimes, well-paying jobs.

Ask many of his 1,300 neighbors what they fear most besides their homes collapsing and the majority will say it is the thought of these natural resources eventually drying up.

"I'm too old to work (in the mines) but the kids do earn some handsome cash," said Bian. "But I am worried about things in the future. I don't know how much long-term damage these industries are doing to our homes."

Mining has been a major driving force behind the country's rapid development and has steadily grown over the past 20 years, with about 5 billion tons of resources - gold, coal, iron ore - now mined every year, said Jia Zhining, director of the No 4 Geo-engineering Investigation Institute in Shanxi province.

Yet as coal and iron ore supplies diminish, communities that rely on them for employment are being forced to find new pillar industries.

The situation is particularly urgent in the 44 cities so far classed as "depleted in primary resources" by the National Development and Reform Commission, the top economic planning body.

In a recent report, the commission said 50 of China's 390 mining towns have already run dry, leaving three million miners jobless and affecting about 10 million more people.

The State Council has been helping the nation's 118 resource-dependent cities adopt low-carbon economies since 2007, with resource-depleted cities receiving central government funding to spend on shutting down illegal mines, boosting employment and enhancing environmental protection.

The money is also used to relocate or compensate people living near dangerous mine shafts.

The amount of funding each city receives varies. Although no official statistics are available, Jingdezhen, which was one of the 44 cities given "depleted" status by the National Development and Reform Commission, could potentially get as much as 1 billion yuan ($145 million) over four years, according to a report by News Magazine last year.

Local governments are desperately working on how to fill the void left by mining, and have already attempted to develop tourism and have built coal chemical plants. However, these experiments have so far achieved little success, say analysts.

In Zaozhuang, a city in Shandong that actually gained its name in the late 19th century from a coal mine, the restructuring of its core industry is well under way, according to mayor Chen Wei.

Its coal chemical bases are already among the most competitive in the country, while tourism is booming thanks to the reconstruction of two key sites that commemorate heroic acts during the War of Resistance against Japanese Aggression (1937-1945), he said. (The city is famous for a band of fighters known as the "railway guerrillas" and Taierzhuang, where the Kuomintang army won a decisive battle over the Japanese in 1938.)

In fact, efforts have been so successful that the city is already a "national model" for resource-dependent cities seeking economic restructuring, Wang Erbin, director of Zaozhuang's information office, told China Daily.

However, Yang Weisheng, a former official with the Zaozhuang bureau of mines, who now serves as a political advisor to the local government, disagreed.

"We're at a point where we have exhausted our resource advantages and failed to foster new advantages in the process. The restructuring hasn't been going very well because there is no industry (other than coal) that could lead this city," he said.

And although tourism may offer the potential for growth, Yang said it will never be the city's pillar industry.

"We're still heavily dependent on coal. Crude coal costs 200 yuan a ton but can sell for four times that price. As long as there's still coal down there, of course people will do whatever they can to be in the business," said Yang, who is a member of the Zaozhuang committee of the Chinese People's Political Consultative Conference.

As natural resources in the east of Zaozhuang were depleted in the 1990s, its mining industry turned westward to Tengzhou, a prefecture-level city under its jurisdiction. Now surrounded with coal mines, Tengzhou accounts for more than 70 percent of Zaozhuang's economy.

"The coal industry is thriving in Tengzhou but when you're young, you ought to think ahead for what might happen when you're old," said Yang, who believes that the city's ambition to restructure its coal industry is essentially more of an upgrade.

"To excel in the coal chemical industry, we need plenty more water, electricity and coal than before," he said, adding that to truly restructure its economy, Zaozhuang should take time to shut down illegal shafts, relocate affected residents and gradually find and shift to another pillar industry.

Government funds intended for relocation projects in Zaozhuang are twice as much as the investment made in the city's coal chemical projects, according to Chen's transformation initiative.

Meanwhile, authorities across China shut down more than 13,000 illegal mines between 2005 and 2009, show figures released by the State Administration of Work Safety.

Stuck in the middle

After several protests by villages against mining activities in the late 1970s, the Shandong government established a department called the "office for villages' relocation for mines", which acts as a coordinator between residents and mine owners.

"Shandong is the only province that has such an agency, mainly because it has a dense population and a lot of rich coal resources under buildings and farmland," said Zhao Peng, 48, deputy director of the unique office in Zaozhuang. "Any development is bound to cause some loss, and when loss is incurred someone has to be there to coordinate things. That's where we come in.

"Depending on the level of physical damage done to the property, we ask mines to compensate farmers and, if need be, request towns and villages to come up with a plan to relocate."

Under the law, all mines are required to have exploitation plans and must report to the relocation department if they want to dig under a building or farmland. If relocation is necessary, mine owners must also hire accredited agencies to conduct a thorough site review and submit a relevant report to authorities.

"But in many cases the rules aren't enforced," complained Zhao, who joined the department in 1986. His office, which has only five staffers, is often caught in an embarrassing position when negotiating terms because it has neither the administrative right to enforce laws, nor any power to push the boundaries.

When asked by China Daily, Wang, director of Zaozhuang's information office, was not aware of where Zhao's office was or even what department it belonged to.

"In the end, what typically happens is that when coal prices are low, mines have a hard time operating and say they don't have enough to compensate farmers. They all acknowledge the losses their operations incur. But they just can't or don't pay," said Zhao.

Mining companies are asked to pay farmers between 500 and 900 yuan per year for every mu - a Chinese measurement equal to 0.06 hectare - of arable land entirely depleted by their activities. They are also required to hire a finite number of local landless farmers to ease both unemployment and tensions.

For farmers who see their harvests reduced as a result of mining, companies are generally asked to give one-time payments of several thousand yuan, or the approximate income for three to four years' harvest.

The companies also should pay farmers 1,000 yuan of reclamation fees for every mu of affected arable land.

"Over-exploitation has increased our workload," added Zhao. "In an ideal world, we need mining companies to work by the rules, instead of trying to cover up after a loss and make under-the-table deals with the village cadres. But this will take time."

Cause and effects

Although Chinese authorities continue to steer towards a green economy, residents in resource-dependent cities say they expect the environmental impacts of mining to far outlast the jobs.

In Fenghuang town, which is under the administration of Zibo - a Shandong city famous for ceramics, coal and iron that is not on the list of 44 "depleted" cities - the mining industry has already badly affected drinking water and farmland.

According to citizens, by 2007, water sources even as far as 120 meters underground had been contaminated, forcing the town government to buy a 250-meters - by 100-meters water tank to ensure everyone has clean drinking water.

Residents also claim the vast number of empty pits is causing land to sink, with many citing an incident in Beijin village in 2008 when a three-story office building sunk 60 meters the night before it opened. The Beijin Group, which owned the building, acknowledged the incident happened but declined to comment further when contacted by China Daily.

Despite their complaints about the mining industry, however, many locals said they cannot imagine life without the mines.

Bian Yubing, head of Hong Huayuan village, also in Fenghuang, said almost all the young men in the area are employed by nearby mines.

"You have to understand the situation here. If we solely relied on farmland, we wouldn't even have enough to eat," he said.
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