In China’s coal country, 100,000 lose their jobs

Rob Schmitz Nov 3, 2015

In China’s coal country, 100,000 lose their jobs

Rob Schmitz Nov 3, 2015

Behind the doors of this gritty coal town, nobody answers the repeated knocks. When they hear there’s a foreign journalist on the other side, most keep their doors shut. But then, a woman opens hers, shoos the visitor inside, and explains why. “We don’t dare talk about what’s happened,” she said. “You talk, and they’ll retaliate.”

She’s referring to local government officials and the managers at the Eastern Wind coal mine across the street. The mine is run by Longmay, the largest state-owned coal mining company in China’s northeast. It’s one of several here in the city of Qitaihe that will empty when Longmay lays off 100,000 workers later this autumn.

The neighborhood across the street from the Eastern Wind mine will be impacted by Longmay’s mass layoff of 100,000 people. (Rob Schmitz/Marketplace)

The woman — who’s too scared to give me her name — said her 50-year-old husband will be one of them.

“We’re ordinary people, and now we can no longer get by,” she said through tears. “You have to allow us to live! Where are you gonna put us? The government is cracking down on corruption, but it’s all for nothing! The rich get richer, and the rest of us lose our jobs and can’t survive.”

As government leaders in Beijing hammer out reforms meant to transform China’s economic growth model from one based on building infrastructure to another based on consumers buying things, coal mining regions like this one are being left behind. The miners here have spent their lives contributing to China’s incredible growth, but they are finding themselves on the losing end of China’s historic economic transformation.

Next door, a vendor named Song sells vegetables to the families of miners. Song’s husband is a miner, too. He’ll soon be out of work. “Once he’s laid off, we’ll get modest living expense payments for three years,” she said. “After that, they claim they’ll offer him job training, but come on! Train him to do what? What can they possibly train him to do? Coal mining is all he knows!”

Mining makes up nearly a quarter of Qitaihe’s economy. Most of the city’s 800,000 people work to support the city’s coal mines. Longmay runs twelve mines here. Several will be shut down as the company lays off 40 percent of its workforce. “This is all related to corruption,” Song said, yelling. “The whole Communist Party is corrupt; the entire system. They do whatever they want. We could all die on the street and it’s no business of theirs!”

Four years ago, Longmay made more than $100 million in profit. But now this region has the slowest economic growth in China, and lower coal prices have plunged the company into hundreds of millions of dollars’ worth of debt.

Corruption also played a part. A few years ago, a company vice president was charged with accepting $50 million worth in bribes, money he used to buy dozens of sports cars and 58 houses, several of which he had never even visited. A scene of the Longmay official sobbing at his corruption trial was the highlight of a government educational video warning officials of how not to conduct business in today’s China.

The homes surrounding the Eastern Wind mine owned by Longmay are slowly caving into the earth. Mines lay just beneath the surface. (Rob Schmitz/Marketplace)

When Marketplace called Longmay and the government of Qitaihe, officials refused requests for interviews. Instead, a local official named Wang Hongbin visited the journalist at his hotel, ordered him not to speak to any more employees of Longmay, and appointed local police to follow him for the rest of his trip, escorting him to the airport on his final day in the city.

For both Longmay and the city of Qitaihe, time is running out. Deng Shun, an analyst of China’s coal industry at ICIS C1 Energy, said he’s never seen a coal company lay off so many workers at once. And he said it’s not just Longmay.

“Longmay’s situation is in fact rather universal in China in recent years,” Deng said “Datong Coal Mine Group in Shanxi, China National Coal Group, Yankuang Group in Shandong, Shandong Energy Group — all these old coal companies have similar predicaments. They all have heavy personnel burdens, and they all have big local social responsibilities.”

Combined, these companies have 600,000 employees whose jobs could soon be on the chopping block, too. “This situation is precisely what the government fears the most,” Deng said. “A lot of idle men in their prime working age, without jobs. It threatens to cause social unrest.”

In April, several thousand Longmay workers went on strike, bringing downtown Qitaihe to a halt because they hadn’t been paid in months. A miner named Zhang Yong hasn’t been paid, either.

Zhang Yong works for a subsidiary company of Longmay Mining in Qitaihe.  (Rob Schmitz/Marketplace)

Longmay owes the 52 year-old two months of salary. And yet, every morning, he arrives at the mine and is taken a mile underneath the ground to work a 10-hour shift, seven days a week, 365 days a year; not a single day of rest. If you ask for a day off, he said, they could find a worker to replace you. There are plenty of them now, he said. Zhang lives inside an abandoned church. He’s a caretaker here when he isn’t in the mine. “Every Sunday, this church used to be full; there wasn’t a place to sit. Now everyone’s moved away,” he said. 

Zhang’s church is now abandoned due to a coal mine that’s causing the structure to cave in. (Rob Schmitz/Marketplace)

This neighborhood, full of houses that have been demolished, has been deemed uninhabitable. A coal mine lies just beneath the surface of the earth, and it’s slowly swallowing the church. The altar has sunken below the back row of pews, and Zhang has nailed a portrait of Jesus atop a wide crack that snakes across the wall like a bolt of lightning.

His world is caving in. “Once coal goes bust, Qitaihe’s economy won’t survive. After the mines shut down, many of us will be forced to move inside the wall,” he said.

A room behind an abandoned church in Qitaihe shows one of many cracks running along the wall. The church is slowly caving into the ground due to a coal mine just underneath the earth’s surface. (Rob Schmitz/Marketplace)

People in this region commonly say “inside the wall” to refer to the populated part of China that lies south of the Great Wall. Zhang’s town is in Manchuria – north of the wall – a place the Chinese used to consider remote, barren, and inhabited by savages. Pretty soon, Zhang said, hordes of miners with no jobs and no education will find their way south to the wealthier cities of Beijing, Shanghai and beyond.

They’ll look for work, he said, and if they don’t find it, they’ll look for trouble.

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