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SHANGHAI -- China's coal prices could rally if Beijing orders stringent safety checks at coal mines in the wake of a blast in northern Shanxi province on Sunday, which killed at least 74 miners. Analysts say China was facing a coal output surplus of more than 50 million metric tons this year before the fatal explosion, but this could fall sharply and shore up prices if mines are forced to close temporarily or permanently. Beijing has long pledged to improve safety at its coal mines, and last year shut more than 1,000 shafts that it considered unsafe. But a death toll of 3,200 people last year, while representing a 15% decline from 2007, means the country's coal mines remain the world's deadliest.  "What sets this accident apart is that it happened at a state-owned coal mine of relatively large size," said Li Chaolin, a market watcher with the China Coal Transportation and Distribution Association. "So it is possible that stringent safety checks will be carried out not only in small coal mines but also in large ones with good safety records," he said. View Slideshow At Least 74 Killed in China Mine Blast Tunlan coal mine, where the explosion occurred, is a large, modernized coal mine under the state-owned Shanxi Coking Coal Group with annual coal production capacity of 5 million tons, according to the official Xinhua news agency. The group's major products include high-quality coking coal - a raw material used in steel production. Prior to the blast, analysts believed coal prices were set for a sustained period of weakness due to falling demand from power plants and other industries. Coal mines that were scheduled to resume output after annual checks and spring ending the demand for coal for heating also were expected to weigh on prices. Coal accounts for two-thirds of China's total energy mix, and around 90% of output is from small coal mines, defined as having a capacity of less than 300,000 tons a year. Shanxi province produces a quarter of China's coal output, which last year totaled 2.62 billion tons. Ma Xiaoguang, a coking coal analyst at Umeta, said all coal mines in Shanxi below 300,000 tons of annual capacity shut down in mid-December due to sluggish downstream demand and annual safety checks. She said the mines were originally scheduled to resume production by the end of March, when the annual meeting of China's legislature is due to wrap up, but now it seems likely the reopenings will be delayed. "Proximity to the National People's Congress means the accident will likely come up as a topic during the meeting" and the potential ramifications will be greater, Ms. Ma added. Xinhua said Beijing has ordered a probe into the blast, and three officials at the mine have been dismissed. Jin Yang Powered by my VerryBerry®
