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Xinhua: Coal Mine Companies in Shanxi Province Are in Serious Financial Trouble

Xinhua reported that, by the end of 2015, seven major coal mine companies in Shanxi Province were carrying 11 trillion yuan (US$1.69 trillion) in debit, an increase of 10.2 percent compared to 2014. Their debt to asset ratio grew from 81.16 percent in 2014 to 82.3 percent in 2015. Meanwhile the operating cash flow dropped from 16 billion yuan (US$2.45 billion) to a negative 4.81 billion yuan (US$.76 billion). The article said that most of the employees were forced to take a pay cuts or were not paid on time. Statistics showed that, by the end of the first three quarters of 2015, the coal companies owed 3.5 billion yuan (US$.54 billion) in pay compensation and 10.9 billion yuan (US$1.67 billion) in social security funding. The human resource report from one of the coal mine companies said that its workers had to take an involuntary or voluntary work force reduction option or relocate to work on different projects. Among the seven coal mine companies, six of them rely on financial support from the government, which has grown 21.5 percent to 5.6 billion yuan (US$.86 billion). According to the statistics from the Ministry of Human Resources and Social Security, among the 1.8 million coal and steel industry workforce to be relocated, 1.3 million of them are coal mine workers.

Source: Xinhua, May 17, 2016