Wang Qiang watched as the convoy of coal mining trucks crisscrossed the pastures. They were his trucks, but instead of fossil fuel, they hauled loads of sheep manure.
Seven years before, Wang arrived at the Muli coalfield in West China’s Qinghai Province, partnering with friends to buy dozens of coal trucks. Now they have been contracted to transport manure used in projects to restore the local environment long ravaged from coal mining.
On August 4, 2020, Ma Shaowei, general manager of Qinghai Xingqing Trade and Engineering Company, reportedly had raked in more than 10 billion yuan (US$1.53b) from illegal coal mining disguised as ecological restoration. A crackdown on Qinghai’s officialdom followed, leading to the disgrace and downfall of dozens of senior officials including Wen Guodong, deputy governor of the province.
From 2004 to 2014, exploitation of Muli coalfield, the largest highgrade coal reserve in Qinghai, was rife, resulting in 19 mountains of waste rock and 11 large mine craters south of the Qilian Mountains. Xingqing’s activities left the area with a scar 5 kilometers long, 1 kilometer wide and 300 to 500 meters deep.
In late 2020, Qinghai launched its largest-ever ecological restoration project targeting mines in the province. Wang Xia, deputy director of the management committee of Qaidam Circular Economy Pilot Zone in northern Qinghai which focuses on fossil fuels, chemicals, materials and new energy, told NewsChina that the ecological efforts at Muli coalfield required pooling resources from across the province.
“Healing such a huge scar on the earth comes with many challenges,” she said.
Located in the northern part of the Tibet-Qinghai Plateau, Muli coalfield has 3.54 billion tons of surveyed coal reserves, more than 87 percent of Qinghai’s total. Since 2003, a growing number of mining enterprises have arrived to tap its resources. Thousands of miners and merchants flooded the once quiet town of Muli.
In 2014, the central government released several directives to curb the exploitation in Muli, but illegal mining went unchecked. After news of Xingqing’s huge illegal mine made headlines in 2020, Qinghai provincial government terminated all mining activities in Muli. Qinghai quickly unveiled an ambitious environmental plan aiming to restore vegetation by planting native grasses that require a 30-centimeter layer of topsoil. The Tibet-Qinghai Plateau, however, only has a thin layer of soil on its permafrost surface. This shortage of soil was the main obstacle to restoring vegetation in Muli.
“It’s impossible to plant grass on rocks. Soil restoration is necessary,” Deng Erping, deputy director of the Qinghai Forestry and Grassland Bureau, said during a recent vegetation restoration meeting in the province. “Transporting soil from other areas requires roughly 3 billion yuan (US$458m), which is unaffordable if financed locally.”
Qinghai provincial government eventually adopted a plan to blend fine particulate from waste rock, sheep dung and artificial fertilizers to improve the quality of soil. It would require at least 1.38 million cubic meters of manure.
Wang Qiang’s coal trucks transport sheep dung from farmers more than 200 kilometers away. “In 2000, a truckload of dung cost 200 yuan (US$31). Nowadays, it’s surged to 500 yuan (US$76),” he said.
Despite these efforts, the project faces shortages. There is still not enough manure for a 60,000 mu (4,000 hectares) area in Muli in dire need of improvement.
The low maturation rate of the grasses is a more recent issue. A botanist involved in the environmental rectification project told NewsChina that there were more than 30 types of grasses native to Muli but only four are currently being planted.
“Over the past several years, the maturation rate of grasslands in Muli is only 5 percent and there are still many challenges, including continued grazing around Muli,” he said.
Wang Qiang told our reporter that when he worked for mining companies several years ago, unpaid wages were rare. But after switching to transporting sheep manure, he is seldom paid on time. “With so much subcontracting going on, I don’t know which company I’m actually working for,” he said.
From October to November 2020, Muli coalfield held three rounds of contract bids for the environmental restoration projects with a total investment of 3 billion yuan (US$458m).
“Many companies that bid figured that environment restoration funding would be deep because compensation from the enterprises that damaged the environment would be huge,” said forestry bureau official Deng Erping. “Xingqing alone made more than 10 billion yuan (US$1.5b) from coal mining. If the ecological compensation is 5 billion yuan (US$763m), all the project’s financial problems would be solved.”
However, funding sources are still up in the air. In late 2020, more than 30 bank accounts belonging to Ma Shaowei and Xingqing were seized totaling 160 million yuan (US$24m), far from enough for the ecological work.
“It’s a tough job to solicit adequate funding for environmental restoration from coal mines after they’ve been exploited,” Hu Zhenqi, a professor of energy resources at the China University of Mining and Technology in Beijing, told NewsChina. “Ecological compensation assessments are currently underway. It will be difficult to get companies that exploited Muli to pay compensation,” he said.
According to tender notices from the provincial government, environmental restoration fees are mainly sourced from fines and gains from illegal mining, compensation from companies involved, and financial subsidies. But because of the funding shortfall, companies that won bids for environmental restoration have to work without getting paid.
After Xingqing’s illegal mining was spotlighted, Qinghai Province began calculating compensation for ecological damages to Muli coalfield. On March 8, local authorities finished their first round of assessments, and soon will kick off litigation.
“Coal mining companies made great fortunes in their heydays. They should be held accountable for the ecological restoration,” said Wang Xia with the Qaidam Circular Economy Pilot Zone. Several heads of coal mine enterprises in Muli told our reporter that these days, they are preoccupied with the criteria for environmental damage compensation.
In August 2020, Qinghai State-owned Assets Supervision and Administration Commission contacted its counterparts in provinces including Hebei, Henan and Shandong, asking them to help withdraw State-owned mining enterprises from Muli.
“Qinghai State-owned Assets Supervision and Administration Commission entrusted the local government to sign withdrawal contracts with our company. Authorities will then evaluate assets and prepare for the upcoming compensation,” Niu Quanmin, chairman of Qinghai Zhongao Energy Development Company, told NewsChina.
“After Xingqing’s illegal mining was reported, our company was forced to close.” The company had invested over 1 billion yuan (US$655m) in Muli coal mines since 2014.
Over the years, the majority of Muli’s coal mines were unlicensed. “Muli coalfields have been rectified several times but the effects are far from satisfactory. Many mining enterprises have complaints against them,” a general manager of a coal mine enterprise in Muli told our reporter on condition of anonymity.
More than a decade earlier, the local government tacitly ignored illegal mining activities in Muli to attract investment. In 2011, Muli Coalfield Management Bureau was established and granted powers over land resources, environmental inspection and safety supervision.
In late 2020, the central government’s investigation team determined that Muli Coalfield Management Bureau had neglected its duties over the past six years. Li Yongping and several senior officials of the bureau were punished for serious violations.
A coal industry expert told NewsChina on condition of anonymity that mining enterprises with licenses in Muli are not located in the nature reserves under State and provincial protection, adding that if mining had been properly regulated early on, the environment would have been able to sustain the exploitation.
“If coal mines pay little attention to ecological restoration when environmental protection is prominent on the national level, they can’t exist,” he said.
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