A coal mine explosion happened in northern China in Gujiao
City, near Taiyuan, capital of Shanxi Province on 22 February 2009 (Sunday), killing 74
coal mine workers and injured 114. The pre-dawn blast occurred while 436 workers were in
the Tunlan Coal Mine in Gujiao City. The mine is owned by Shanxi Coking Coal Group,
China's largest producer of coking coal. Tunlan mine produces 5 million tonnes of coking
coal a year. (Source: Xinhua News Agency, 23 February 2009).
According to Mr Liu Guodong, Managing Director of Sino Hua-An International Berhad
(Hua-An Group) , the accident in Shanxi Province would not affect the
coking coal (raw material) supply of its subsidiary, Linyi Yehua Coking Co., Ltd. in
Shandong Province as our raw materials are supplied from coal mines within
Shandong Province only. However, Mr Liu cautioned that in the short term
period, the coking coal prices in Shanxi Province is likely to increase and may
subsequently bring up the overall coking coal prices (in other provinces) in China.
In view of the recent (December08/ Jan09) pick-up of demand for steel products in China
(as a results of USD 586 billion stimulus package), should there be any increase in the
coking coal prices, Hua-An Group expects the incremental cost to be able to pass-on to
our steelmakers customers because metallutgical coke prices are expected to increase as
well which is in tandem with the increasing demand of steel products in China lately.
