On May 21, the board of directors of Gansu Nenghua Co., Ltd. (000552) issued an announcement. On May 19, a sudden water inrush and dangerous accident occurred at Well No. 1, Section 2, No. 204 working face of Gansu Jingmei Energy Co., Ltd.'s Wangjiashan Coal Mine Branch in Pingchuan District, Baiyin City, Gansu Province. After the accident, the local authorities immediately activated emergency plans and carried out emergency rescue operations. Of the 133 people underground, 130 have been safely evacuated, but as of 7 a.m. Tuesday (20th), three people were still trapped and unaccounted for, and later died after rescue efforts failed.
It is understood that after the water inrush accident, a large amount of coal slime surged from the light-duty working face, even flooding the transportation drift at one point. The on-site personnel initially estimated that the amount of coal slime surged was about 510 cubic meters. The precise positioning system of the three missing persons shows they are right behind these coal slimes, which poses certain difficulties for rescue.
Gansu Jingmei Energy Co., Ltd.'s safety deputy chief engineer Gao Yaquan explained that the accident site is at a vertical depth of 610 meters from the surface. Currently, 69 people have been deployed for tense rescue operations, consisting of 30 members of the mine rescue team and 39 emergency workers from the mining area. However, due to the narrow cross-section of the underground tunnels, clearing is quite difficult.
No matter how much emphasis is placed on the objective technical difficulties of rescue, this disaster is fundamentally the result of capitalist enterprises pursuing profits. The No. 1 well was originally an old mine, and further capital was invested on top of it, with a new mining face (2-204) established this year. For high-risk mining work, capitalists inevitably increase labor intensity and extend working hours to shorten production cycles and accelerate capital turnover in order to gain more profits. Moreover, as long as production can continue, no extra money will be spent on the mine’s safety production facilities. The water inrush accident clearly stems from the aging equipment and the possibility of underground water accumulation in the old mine after years of mining. It occurred just eight days after the new 4-meter section was put into operation. Ironically, the WeChat official account “Jingmei Company Wangjiashan Coal Mine Branch” held a special safety production meeting for the No. 2-204 working face last Thursday (15th), claiming to implement decision-making arrangements, but it was merely a formality.
The Wangjiashan Coal Mine Branch is not an independent legal entity. The No. 1 well of Wangjiashan Coal Mine Branch has an independent production system and safety production license. In 2024, it produced 733,800 tons of coal, accounting for 3.85% of the company’s total coal production. It is estimated that this mine will achieve an operating income of 246 million yuan in 2024, accounting for 2.56% of the company’s total operating income.
Gansu Nenghua’s first-quarter report shows that during the reporting period, the operating income was 1.92 billion yuan, a year-on-year decrease of 32.1%; net profit attributable to the parent was 51.06 million yuan, down 90.5% year-on-year; net profit after deducting non-recurring gains and losses was 24.09 million yuan, down 95.4% year-on-year. The company stated that the significant decline in performance was due to falling coal prices, reduced revenue, and decreased profits.
Just last month, another subordinate of Gansu Nenghua, Jinhé Coal Mine, also experienced a carbon dioxide outburst accident, resulting in 5 deaths. “On the evening of April 14, Gansu Nenghua Co., Ltd. (Gansu Nenghua, 000552.SZ) announced that on April 13, a carbon dioxide outburst occurred at the tunneling face of Jinhé Coal Mine, a subsidiary of the company’s Yaocai Coal and Power Group. The accident caused 2 deaths, 3 injuries, and despite full rescue efforts, the injured persons died.”
Jinhé Coal Mine is not an independent legal entity. It is a coal (rock) and carbon dioxide outburst mine with a designed capacity of 1.2 million tons per year, accounting for 5.96% of the company’s approved coal production capacity (including joint trial operation mines). In 2024, this mine is expected to generate an operating income of 870 million yuan, about 9% of the company’s operating income (unaudited).