Longmay scraps US$1bn IPO
12 February 2007
Heilongjiang-based Longmay Coal has canceled plans to raise US$1 billion
from an initial public offering due to safety issues at its mines, the South
China Morning Post reported. Six miners were killed at the state-owned
firm’s Taoshan branch in Qitaihe in September 2006 after a mine collapsed. In
2005, an explosion at its Dongfeng coal mine in the same city killed 171
people. China’s
coal mines have the worst safety records in the world, averaging 13 deaths a
day; yet in 2006, the number of fatalities dropped 20% from the year before, to
4,746. Many of the deaths occur in illegal mines from over-mining and
inadequate shaft support, according to the State Administration of Coal Mine
Safety. Because the central government has forced the industry to
consolidate, the mainland's coal companies are intent on raising funds through
IPOs for a better chance of survival.