Photo taken on Aug. 6, 2020 shows the mining site where the Qinghai Xingqing Industry & Trade Engineering Group Corporation has been suspected of illegally mining, in Muli mining area in Tianjun County, northwest China's Qinghai Province. (Xinhua/Li Zhanyi)
— For 14 years, a private company headquartered in Qinghai has been suspected of illegally mining more than 26 million tonnes of coal near a national nature reserve in northwest China, raking in more than 10 billion yuan, an investigation by Xinhua News Agency has found.
— An expert said the reckless mining not only damaged the surrounding area but also caused grassland degradation and desertification, which will lead to the deterioration of the ecological environment in the upper reaches of the Yellow River and Qinghai Lake region.
— The Xinhua investigation prompted authorities in Qinghai to launch an investigation into the incident. Two officials have been removed from office for dereliction and the chairman of the company has been put under criminal coercive measures by the police.
Years of exploitative illegal mining near a national nature reserve in northwest China has taken a toll on the alpine grassland and wetland, posing a threat to the environment of a key water conservation area, an investigation by Xinhua News Agency has found.
For 14 years, the Qinghai Xingqing Industry & Trade Engineering Group Corporation, a private enterprise headquartered in Qinghai, has been suspected of illegally mining more than 26 million tonnes of coal in the Juhugeng coal mine in the Muli mining area, raking in more than 10 billion yuan (about 1.43 billion U.S. dollars), according to the investigation.
The reckless mining continued for years despite two rounds of inspections by central authorities targeting environmental violations in the Qilian Mountains, and the banning of all mining activities in Muli by authorities in Qinghai Province, the investigation showed.
The investigation was conducted over a span of more than two years by Economic Information Daily, a newspaper affiliated with Xinhua. A Chinese-language report was published last week, prompting authorities in Qinghai to launch an investigation into the incident.
At a press conference on Sunday, Li Jiexiang, executive deputy governor of Qinghai, said preliminary investigations found that Xingqing is suspected of violating laws and regulations.
Two officials in Haixi Mongolian and Tibetan Autonomous Prefecture of Qinghai have been removed from office for dereliction. Ma Shaowei, chairman of Xingqing, has been put under criminal coercive measures by the police, according to the press conference.
RAMPANT ILLEGAL MINING
Rich in charred coal, the Juhugeng coal mine is located at an altitude of 4,200 meters in Tianjun County in Qinghai, near the Qilian Mountains national nature reserve, which sits on the border of the provinces of Gansu and Qinghai. Among the seven mining fields of Juhugeng, the No. 1 field is the largest in size and reserves.
During an investigative trip to the mine in late July this year, a Xinhua reporter saw several excavators and loaders working at the site while trucks loaded with coal and muck crawled along roads in the mining area one after another.
Currently, Xingqing had four mining teams, 120 types of machinery and nearly 300 people working in the No. 5 well of the No.1 field in Juhugeng, an informant who declined to be named told Xinhua.
The open-pit mining site stretched for 5 km, forming a ravine about one km wide and 300 to 500 meters deep. The excavated underground frozen soil, rock and coal gangue was piled up 40 to 50 meters high near the mine, burying large areas of grassland.
Similar mining activities were seen during the reporter’s previous trip to the mine on April 26, 2019. On another trip on July 8, 2019, the reporter found, in a little more than two hours, 75 trucks each loaded with at least 50 tonnes of coal left the mining area operated by Xingqing for a train station kilometers away.
BILLIONS IN REVENUE
Xingqing has been mining illegally in the Juhugeng coal mine for 14 years, after the company engaged in the operation of Juhugeng in 2005 and began mining a year later, according to the investigation.
Despite several rounds of corporate restructuring with other energy companies in Qinghai since 2005, Xingqing and its wholly-owned subsidiary Qinghai Xingqing Tianjun energy group Co., Ltd. have been the sole operators of the above-mentioned No. 5 well of the No.1 field in Juhugeng.
Neither Xingqing nor its subsidiary had ever obtained mining licenses for the No. 1 field, which makes their mining activities illegal, according to an official of Qinghai’s provincial natural resources bureau.
In an earlier interview, Ma told Xinhua that the company was still in the process of corporate restructuring, insisting that Xingqing and its subsidiary “had ceased production to deal with the restructuring” and “had not been operational.”
However, data from the provincial government shows that Xingqing paid a total of 333 million and 412 million yuan in taxes in 2011 and 2012, respectively. Based on the tax records, analysts estimated that the company had illegally mined over 20 million tonnes of high-quality charred coal from the No. 1 field of Juhugeng between the end of 2006 and June of 2014, making at least 11 billion yuan.
Xingqing’s internal documents show that it mined a total of 20.5 million tonnes of coal from the No. 1 field, raking in total revenue of 11 billion yuan, corroborating the estimation.
Analysts also estimated that from 2015 to 2020, the company mined a total of over 5 million tonnes of coal and made about 4 billion yuan, bringing the 14-year total to 25 million tonnes of coal and 15 billion yuan.
In the past, hundreds of mines and many construction projects in the Qilian Mountains nature reserve have taken a toll on the environment. In response, the central authorities launched inspections on environment protection in the area.
In August 2014, the provincial authorities in Qinghai ordered all coal mines in Muli to stop operation and take measures to recover the environmental damage.
An informant told Xinhua that the company has adopted the strategy of pretending to cooperate with environmental supervision while secretly continuing to mine illegally.
The company’s documents show that in 2014 and 2016, despite severe crackdowns on illegal mining, Xingqing mined over 1 million tonnes of coal in both years.
“When officials came to inspect, Xingqing usually ceased mining for a day or two. To cover its mining activities, the company often hid away its machinery and blocked roads to the mining area,” said an informant inside Xingqing, adding that the company usually mined at night or right after inspection teams left.
In the most recent case on July 28, Xingqing ceased mining for four days to cope with an inspection. At about 4 p.m. on July 31, just two hours after inspectors had left, the company ordered its staff to restart mining that night.
Xingqing’s mining teams normally worked around the clock. During past inspections, Xingqing would often receive a tip in advance, which gave them time to cover evidence of mining activities, said an informant.
When asked about Xingqing’s current mining activities, Ma told Xinhua over the phone, “operations in the coal mine have long been suspended.”
Environmental experts have stressed the ecological importance of the Muli mining area, where there are large areas of frozen soil and wetland vegetation such as alpine meadows
The location of the Juhugeng coal mine is the source of the Datong River, a tributary of the Yellow River, the second-longest river in China, and the rivers running into the Qinghai Lake, said an expert from Qinghai University.
Extensive and reckless mining in Muli not only damaged the surrounding area but also caused grassland degradation and desertification, which will lead to the deterioration of the ecological environment in the upper reaches of the Yellow River and Qinghai Lake region, the expert said.
Zhang Hongfu, an academician of the Chinese Academy of Sciences, has expressed great distress over the “exploitative and destructive” mining activities by Xingqing.
“The local ecology of Muli is extremely sensitive and fragile,” said Zhang. “Large-scale mining has damaged the permafrost, threatens water conservation and will lead to irreversible drought in a large area.”
The authorities should conduct a thorough investigation into Xingqing, whose reckless mining operations have damaged the ecological system and non-renewable resources, he suggested.