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CASM-China Progress Report-2007/08

A report on the achievements and activities of CASM-China since 2007, including partnerships with mining groups, research projects, and advisory roles. The report also highlights the challenges faced by the ASM sector in China, particularly in terms of economics, environment, and social issues. The report concludes with a focus on Corporate Social Responsibility (CSR) in ASM.

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CASM-China Progress Report-2007/08

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  1. CASM-ChinaProgress Report-2007/08 Lei Shen1 & Xia Cao2 1 Chair of CASM China Professor at Institute of Geographic Sciences & Natural Resources Research (IGSNRR), Chinese Academy of Sciences (CAS) Secretary Generalin China Society of Natural Resources (CSNR) 2 Member of CASM China Professor at Faculty of Law, Shanxi University of Finance and Economics October 6th -10th 2008 Brasilia, Brazil

  2. Outline A. What Has CASM-China Done Since 2007acc? B. ASM in China and Major Challenges C. Case Study on Corporate Social Responsibility (CSR) and ASM D. Conclusion

  3. What has CASM-China Done Since 2007acc? • Partnerships: CASM China has established a partnership with China International Mining Group (CIMG) • Hosted a workshop with CIMG on November 12,2007 during 2007 China Mining Congress, focusing on community development and ASM development • Initiated a strategic alliance with CIMG to work on social responsibility and mining development. The intention is to promote CASM and raise awareness of ASM in China in January and February 2008 • Host a workshop with ICMM on ‘Biodiversity and Environment’ on November 14, 2008 • Networking • Hosted the 2007 SMAG meeting in November in Beijing • Interviewed with Blacksmith Institute and explored the potential cooperation with CASM China in March 2008 and introduced a local project for Blacksmith in Ningxia Minority Region of the remote western China in July • Kicking off meeting for establishing an Extractive Industry Working Group with Business Social Responsibility (BSR) on March 25,2008 • Attending the workshop of Sino-Australian NGOs and introduced CASM and CASM China on April 24-25, 2008

  4. What has CASM-China Done Since 2007acc? • Research Project • Undertaking a research project with Ministry of Land and Mineral Resources (MOLAR) on June 24, 2008, titling as China ASM Development Policy for the 12th Five-Year Plan and aiming to form a national ASM policy report • Local Meeting and Case Study • Visited in Loufan County, Taiyuan City, Shanxi Province, China on September 7-19, 2008 (more details latter) • Consult and advisory • Shen Lei as advisor member for World Mines Ministries Forum (WMMF) 2008, Toronto, Canada in March 2008 • Shen Lei as Short Tem Consultant for the World Bank from January to June, 2008 • Shen Lei will host a session at 2008 China Mining Congress on 10-13th November 2008 • Shen Lei as a advisor for World Economic Forum in November 2008 • Attend the 2008 ACC of CASM • Shen Lei & Cao Xia presented on October 5-13, 2008 in Brasilia, Brazil • CASM Logo Designing • Contribution to this task, by providing two set of options • Web Updating • Created and update the CASM China homepage in the CASM website at http://www.artisanalmining.org/index.cfm?page=page_disp&pid=5313

  5. 5 case studies Publication Photo gallery People Activity Facets Logo

  6. Outline A. What Has CASM-China Done Since 2007acc? B. ASM in China and Major Challenges C. Case Study on Corporate Social Responsibility (CSR) and ASM D. Conclusion

  7. B. ASM in China ASM occurs in every 31 province in China, particularly concentrated in a clear S-shape area

  8. China’s ASM sector employs more than 5 million people and produces over half its mineral production within approximate 120,000 ASMEs.

  9. The number of ASM in China has been sharply reducing over last years as a result of closure and resource consolidation policies started in 1999-2000 and 2004-2005 respectively.

  10. More than 80% of ASM are privately or collectively owned. Other types include state-owned, share-limited, share-cooperative, joint operation and FDI and so on.

  11. Main ChallengesFacing ASM • ASM has been facing many challenges: • Economic Challenges: • Lack of resources, • Less investment, • Simple technology and training, • Unstable product market, • Conflict with LSM, • Lack of national policy support, for example, 1997 onward closed-up ASM policy, 2003 onward ASM consolidation policy.

  12. Main Challenges Facing ASM • Environmental Challenges: • Frequent production safety and accidents, • degrades surface and ground water, soils, air, and ecology system, • Destroy valuable deposits through poor practice • Disorder waste emission, especially tailing ore reservoirs. • Social Challenges: • Illegal and /or informal organization, • Employs migrant workers, • Smuggling & black trading, • Prostitution & sexual diseases, • Child & women labor, • Poor health and safety, low wages • Poor community relationship.

  13. Social Challenges: Illegal, Employs migrant workers, Smuggling & black trading, Prostitution & sexual diseases, Child & women labor, Health and safety Environmental Challenges: Frequent production accidents, Degrades environment, Destroy valuable deposits, Disorder waste emission. Economic Challenges: Lack of resources, Less investment, Simple technology and training, Unstable product market ASM

  14. Towards CSR of ASM Stakeholders of ASM

  15. ASM could be socially and environmentally responsible…

  16. Outline A. What Has CASM-China Done Since 2007acc? B. ASM in China and Major Challenges C. Case Study on Corporate Social Responsibility (CSR) and ASM D. Conclusion

  17. C. Case study • Location & Features: • Loufan County, one of the Taiyuan City, the capital of Shanxi Province in the central China and one of largest coal producing bases in China. • The upper reach of Fen River, which is the drinking water source of Taiyuan City. • The middle and lower reaches of Fen River is most strongly polluted in the world.

  18. Tailing dam collapse happened at 4 am on 19th May,2007. No death! Tailing dam collapse happened at 8am on 8th September, 2008. 268 deaths

  19. Two major different safety accident GOOD CASE: Fanzhi County, Shanxi Baoshan Mining Ltd.at Yantou Village, Fanzhi County, Shanxi. It formed a total reservoir capacity of iron ore tailing: over 5000,000m3, the height of the dam: 100m At 4am 19th May, 2007, its tailing dam fell down and about 1000,000m3 of mud and sands were washed out 20km long riverbed and submersed factories, roads and farmlands. Fortunately there were no death during this accident!!

  20. Two major different safety accident • BAD CASE:Xiangfen County,Shanxi • Taershan Iron ore mine of Xinta Mining Ltd.at Taoshi Village, Xiangfen County, Shanxi. It formed a total reservoir capacity of tailing: 300,000m3, the height of the dam: 50m • At 8:00 on 8th September, 2008, the tailing dam collapsed, about of 268,000m3 waste mud and sand were flown over the area of 30.2ha with 2km long and 300m wide at fantail. • As of 5:00pm 21st September, 2008, 268 deaths (Male:135, Female:133) were reported, and more than 1,000 people were hit by this calamity.

  21. Why the accidents happened? • The mine corporate produced and built the tailing reservoirs illegally and out of regulations • The comprehensive supervision and renovation were made short shrift of hidden problems • All instructions on safety rectification and revision by governments were difficult to put into effect • Local government and supervising departments were of incapacity in supervision and management • The corporate invested less enough in the mine safety

  22. Loufan County facets Located at the upper reach of Fen River, the drinking water source of Taiyuan City, the capital of Shanxi Province By 2005, 40 ASM with 150million tones of coal reserve and 1million tones per year of coal output (600mt/a for planning) with zero death rate Low gas, simple geological structure, flat berried coal deposits 14 non-coal ASM (9 iron ore mines, 1 quartzite, 2 Bauxite, 2 Dolomite and 1 quarry) and 101 concentrating mills 1 large scale state-owned iron ore mine-Jianshan Mine Four typical ASMs Interviews Joint Cooperated Small Coal Mine by the External Manager Local Owned Small Coal Mine Iron Ore Concentrating Mill Iron Ore Mining and Concentrating Mill Case Study: Loufan, Taiyuan,Shanxi(7th-19th September, 2008)

  23. Case a Case b Coal Mine Distribution in Loufan, Shanxi, China All 14 small coal mines are located at Jingyou Town in the northwest Lofan county but non-fuel mines in the west of the county. Case d Case c

  24. 84 iron ore tailing reservoirs are located at Majiazhuang and Caijiazhuang villeages in the west Lofan county with only 9 iron ore mines. Distribution of iron ore tailing reservoirs in Loufan, Shanxi

  25. Company Name: Shanxi Loufan Hongzhi Coal Mining Ltd. Location: Rengjiagou Village, Loufan Ownership: joint cooperation, one and only in operation in Loufan after the resource consolidation campaign over China and Shanxi Manager: Mr. Li, former manager in Heilongjiang province, one of coal producing provinces in China Capacity: 20million tones geological reserve and 15million tones exploitable ones; 300,000t/a of raw coal with 110 persons (90% from Heilongjiang, 10% local) Main Difficulties: a) capacity expansion, which is controlled as a result of safety performance examination in China; b) separately mine but difficult for mergers and acquisition with local mines; c) Local villages by racketeering high fee on cutting down any trees (one tree beside the road asked for RMB2,000); d) external best available technology but difficult to adopt at local • Joint Cooperated Small Coal Mine by the External Manager

  26. Joint Cooperated Small Coal Mine by the External Manager • Good Experience from Hongzhi • Strict production management: arrange 6 master( one head and five vice-masters); daily control meeting at 6:40 by mine master; weekly meeting by manager; underground mining monitoring on temperature, pressure, gas and wind speed etc); required to prevent as high gas standard, though low gas; beforehand explore the water breakout. • Best CSR practices: • freely provide 800 t/a of coal to the village; • subside RMB1,000/a.person in addition to RMB2,000/a to 11 handicapped; • pay RMB10,000/a of electricity fee for the village; • sponsor large activities for the village such as Wenchuan Earthquake; • Build the road from village (shared with the mine) to main road

  27. Company Name: Shanxi Loufan Hongxinxing Coal Mining Ltd. Location: Rengjiagou Village, Loufan Ownership: collective, one and only in capital construction in Loufan after the resource consolidation campaign over China and Shanxi Manager: Mr. Liu, former manager in Shanxi province, one of coal producing provinces in China but very close to Loufan Capacity: 20.58million tones geological reserve and 12million tones exploitable ones; 300,000t/a of raw coal with 76 persons (50% from Fujian province, 50% local) Capital construction: total investment RMB60million (51% private) , the right and price of mining RMB64million(first year RMB40million, last two year pay off) Main Difficulties: a) Complex relationship with local villages; b) separately mergers and acquisition with previous three local closed mines but all facilities and fix assets were not useful; c) Local villages by racketeering high fee on cutting down any trees (one tree beside the road asked for RMB2,000); d) Unstable unified national ASM policy; e) High investment in mechanic construction. • Local Owned Small Coal Mine

  28. Local Owned Small Coal Mine • Good Experience from Hongxinxing • Advantage: high quality of coal, local government support, past management experience, rich private capital. • Best CSR practices: • Compensate all past mine workers; • subside RMB11,000/a to two villages; • Train all workers and five vice-maters; • Pay environmental protection fund(RMB10/t) and risk guaranteeing fun (RMB3.15 million in total); • Build the road from village (shared with the mine) to main road

  29. Company Name: Shanxi Loufan Baojin Iron Ore Concentrating Mill Location: Majiazhuang Village, Loufan Ownership: private Manager: Mr. Zhao Capacity: Concentrating mill: 150,000t/a, 20 persons; Mining: 1,000,000t/a of iron ore (in construction); raw ore 30% (RMB200/t), waste ore 7-8%,concentrate 64-65%(RMB800-1050/t); Sources from Jianshan State-owned Iron Ore Mine (large scale). Main Difficulties: a) Competition of 101 concentrating mill of the county, 90% of which have no ore to be concentrated. b) Raw ore from the Jianshan mine were unstable depending the market price change; c) Concentrate ore was often difficult to sell out; d) Lack of unified iron ore concentrating development plan; e) High investment in iron ore tailing reservoir and safety monitoring. • Iron Ore Concentrating Mill

  30. Company Name: Shanxi Loufan Huaheng Mining Ltd. Location: Caijiazhuang Village, Loufan Ownership: collective, a merger & acquisition company Manager: Mr. Hong Capacity: 2 concentrating mills (each 50,000t/a) plus 1major mill(200,000t/a) with 107 persons (10% from Shanxi province, 90% local) 1 iron ore mine with 1 million t/a with 70 persons (15 explosive experts from Shanxi province) 1 gasoline supply station Main Difficulties: a) Waste ore utilization; b) Capacity expansion restricted; c) National ASM consolidate policy influence on the future plan; e) Equipment demand for tailing ore processing. • Iron Ore Mining and Concentrating Mill

  31. Iron Ore Mining and Concentrating Mill • Best CSR practices: • Road construction from village to main road (3km); • Green planting the mine and mill area (RMB1million); • Mountain and park construction (RMB1million); • Tailing ore reservoir building (RMB600,000), 3 one with the reservoir capacity of 1.7 million m3; • Mine environmental protection plan implemented; • Sport and leisure facilities building; • Provided 500 local peasants employment; • Pay all tuition fee for 30 poor undergraduate students from the county(3 years); • Host s special safety team demonstration program for the county, after this, an actual action was used to save and support the task of a large collapse of neighboring state-owned iron ore dam in Jianshan mine.

  32. Outline A. What Has CASM-China Done Since 2007acc? B. ASM in China and Major Challenges C. Case Study on Corporate Social Responsibility (CSR) and ASM D. Conclusion

  33. D. Conclusion • CASMChina is continuing to involve in the global events of CASM, raise the awareness of CASM in the world and China, and shift its focus on solving its special issues at the locality like Corporate Social Responsibility (CSR). • CSR is not only a slogan or eyewash; Some done! • More and more major enterprises either international or national-wide have been starting to bear on their own responsibilities to the environment, the society and stakeholders. These responsibilities should include some economic, legal, rights and interests maintenance, environmental protection, community improvement and charity dimensions; • CSR could help corporate to realize its multi-objectives not only in creating more economic profit, but raising its own position, improving the corporate image, enhancing comprehensive competition and realizing its social sustainable development as well; • ASM is not exception. China is rich in ASM (119,024 in 2006) and more than 80% of ASM are privately or collectively owned;

  34. Conclusion • Main challenges facing ASM come from economic, environmental and social dimension; • Although almost all ASM placed the economic interest on their priority objective, our investigation indicates that there are at least a few ASM in Loufan of major coal producing Shanxi province that realized the importance of protecting the mine environment and raising its social responsibility awareness; • Loufan case study also shows that external-run ASM paid much more attention to CSR than those at local mine-owners. The former wills to invest much more on the CSR so that it could mitigate the complicated and difficult relationship with local community and governments. The latter always have some advantages in resources (natural and labor) and good link with the local departments thus any investment on the CSR would greatly improve its corporate social image and realize ASM sustainable development; • ASM in China is thirsting for a stable and clear national policy for themselves. They also wills to do their own efforts on the CSR, given that some economic profits were achieved!

  35. Some Constructive Suggestions to CASM • Shift one of its focuses to the CSR and ASM • Produce more academic publications rather than current informal materials • Create an electronic forum at the CASM website for any further common ideas sharing and exchange • Search some project-targeted funding supports from international agencies, not only cash! • Provide some technologic or engineering supports or short training for local ASM-ers during the ACC • …

  36. Thank you for your attention！ http://www.igsnrr.ac.cn http://www.CASMChina.org http://www.csnr.org Email:shenl@igsnrr.ac.cn

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