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COAL LAW

              of Coal Mine
Chapter III   Coal Production and Safety in Coal Mine
Chapter IV    Coal Management
Chapter V     Protection of Coal Mining Area
Chapter VI    Supervision and Inspection
Chapter VII   Legal Responsibility
Chapter VIII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is formulated for the purposes of rationally
exploiting, utilizing and protecting coal resources, standardizing coal
production and management activities and promoting and guaranteeing the
development of coal industry.

    Article 2  This Law shall apply to coal production and management
activities within the territory of the People's Republic of China and other
sea areas under the jurisdiction of the People's Republic of China.

    Article 3  Coal resources shall be owned by the state. The state
ownership of coal resources, either near the earth's surface or underground,
shall not change with the ownership or right to the use of the land which the
coal resources are attached to.

    Article 4  The state shall practice the policy of unified planning,
rational distribution and comprehensive utilization in coal exploitation.

    Article 5  The state shall protect coal resources in accordance with the
law. Abusive or wasteful exploitation which is destructive to coal resources
shall be forbidden.

    Article 6  The state shall protect the legitimate rights and interests of
those investing to exploit coal resources in accordance with the law.

    The state shall guarantee the healthy development of state-owned coal
mines.

    The state shall implement a policy of support, transformation,
consolidation, combination and improvement with regard to township coal mines
in order to safeguard their standardized and rational exploitation and
orderly development.

    Article 7  Coal mining enterprises must adhere to the policy of "safety
first and precaution foremost" for the safety in production, establish and
improve the safety production responsibility system and the system of mass
precaution and control.

    Article 8  The people's governments at all levels and their departments
and coal mining enterprises must take measures to strengthen labor
protection and safeguard the safety and health of coal miners.

    The state shall adopt special protective measures for workers operating
in the pit.

    Article 9  The state shall encourage and support the adoption of advanced
science and technology and management skills in coal exploitation and
utilization.

    Coal mining enterprises shall strengthen and improve the operation and
management, raise the labor productivity and economic results.

    Article 10  The state shall safeguard the production and work order in
coal mining areas, and protect facilities of coal mining enterprises.

    Article 11  Exploitation and utilization of coal resources shall abide by
laws and regulations concerning environmental protection, prevent and control
environmental pollution, and protect the ecological environment.

    Article 12  The department of coal administration under the State Council
shall be responsible for the supervision and control of nationwide coal
industry in accordance with the law. Other relevant departments under the
State Council shall exercise supervision and control over the coal industry
according to their respective authorities.

    The department of coal administration and other relevant departments
under the local people's governments at and above the county level shall be
responsible for the supervision and control of coal industry within their
respective regions.

    Article 13  Coal mining bureaus are state-owned coal mining enterprises
with an independent legal person status.

    Coal mining bureaus and other coal mining enterprises and coal management
enterprises with an independent legal person status shall, in accordance with
the law, perform autonomous management, assume sole responsibility for
profits and losses, and implement self-binding and self-development.
Chapter II  Planning for Coal Production and Exploitation and
Construction of Coal Mine

    Article 14  The department of coal administration under the State Council
shall, in accordance with the national planning for mineral resources
exploration, work out a national planning for coal resources exploration.

    Article 15  The department of coal administration under the State Council
shall, in the light of coal resources set by the national planning for
mineral resources, organize drawing up and implementing a planning for coal
production and exploitation.

    The department of coal administration under the people's governments of
provinces, autonomous regions and municipalities directly under the central
government shall, in the light of coal resources set by the national planning
for mineral resources, organize drawing up and implementing a local planning
for coal production and exploitation, and submit it for filing to the
department of coal administration under the State Council.

    Article 16  Planning for coal production and exploitation shall be
worked out in accordance with the needs of the national economy and social
development, and be incorporated in the plan of national economy and social
development.

    Article 17  The state shall formulate beneficial policies to support
the development of coal industry and promote the construction of coal mines.

    Coal mine construction projects shall conform to the planning for coal
production and exploitation and the coal industrial policy.

    Article 18  For establishing a coal mining enterprise, the following
requirements shall be satisfied:

    (1) have a feasibility study report or mining plan for the coal mine
construction project;

    (2) have definite scope of the mine and mining area, and a resources
comprehensive utilization plan;

    (3) have geological, surveying and hydrological data and other relevant
data needed for mining;

    (4) have a mine design conformable with the requirements for safety in
production and environmental protection of coal mine;

    (5) have a rational production scale of coal shaft and funds, equipment
and technical personnel suited to the production scale; and

    (6) other requirements specified by laws or regulations.

    Article 19  For establishing a coal mining enterprise, an application
must be submitted to the department of coal administration for examination
and approval in accordance with the requirements specified by this Law and
the scope of authorities at different levels stipulated by the State Council.

    For examination and approval of a coal mining enterprise, a review and
opinions on the scope of mining areas and the plan for comprehensive
utilization of resources shall be required from the administrative department
of geology and mineral resources.

    Coal mining enterprises approved to be established shall, by presenting
the approval document, apply for a mining license from the administrative
department of geology and mineral resources.

    Article 20  The use of land for the construction of coal mines shall be
handled in accordance with relevant laws and regulations. In the case of
requisition of land, the land and settlement compensations shall be paid in
accordance with the law, and the settlement work for the removing residents
shall be done properly.

    The construction of coal mines shall adhere to the principle of protection
of cultivated land and rational utilization of land.

    Local people's governments shall give support and assistance when there
is a need to use land and remove relevant residents for the construction of a
coal mine in accordance with the law.

    Article 21  In construction of coal mines, coal exploitation shall be
conducted in step with the protection and control of the environment.
Installations for environmental protection at a coal mine construction
project must be designed, built, inspected and brought into operation
together with the principal part of the project.
Chapter III  Coal Production and Safety in Coal Mine

    Article 22  Before starting production, a coal mining enterprise shall,
in accordance with the provisions of this Law, apply for a coal production
license from the department of coal administration, and the latter shall
conduct an examination on the enterprise's actual production and safety
conditions and, where considering them conformable with the conditions
prescribed by this Law, issue a coal production license.

    Those without a coal production license may not engage in coal
production.

    Article 23  For applying for a coal production license, the following
requirements shall be satisfied:

    (1) have a mining license obtained in accordance with the law;

    (2) the production system of the mine shaft is conformable with the
safety rules for coal mines stipulated by the state;

    (3) the mine director has received proper training in accordance with the
law and obtained a credential for mine directors;

    (4) the workers of special operation have received proper training in
accordance with the law and obtained an operation credential;

    (5) the communication of production management up or down the pit, inside
or outside the mine is unblocked;

    (6) have field surveying up- against down-pit engineering drawings, plain
figure for excavation and figure for ventilation system;

    (7) have installations which have been completed and have passed the
inspection for safeguarding the safety in production in coal mine and
environmental protection; and

    (8) other requirements specified by laws or regulations.

    Article 24  The department of coal administration under the State Council
shall take in charge of the following coal mining enterprises in respect of
the issuance and control of coal production licenses:

    (1) coal mining enterprises which have been examined and approved to
establish by the State Council or the establishment of which should be
examined and approved by the department of coal administration under the
State Council according to law; and

    (2) coal mining enterprises involving areas of more than one provinces,
autonomous regions or municipalities directly under the central government.

    The department of coal administration under the people's governments of
provinces, autonomous regions and municipalities directly under the central
government shall be in charge of coal mining enterprises other than those
mentioned in the preceding paragraph in respect of the issuance and control
of coal production licenses.

    The department of coal administration under the people's governments of
provinces, autonomous regions and municipalities directly under the central
government may authorize the department of coal administration under the
people's governments of districted cities or autonomous prefectures to be
responsible for the issuance and control of coal production licenses.

    Article 25  The departments for issuance and control of coal production
licenses shall be responsible for the supervision of coal production
licenses.

    Coal mining enterprises having obtained a coal production license may not
transfer or hire out the license to others.

    Article 26  No coal production license may be issued with regard to a
mining area for which a coal production license has already been issued.

    When the term of validity of a coal production license expires or the
coal resources in the relevant approved mining area have been exhausted, the
department issuing the coal production license shall cancel the license and
make an announcement accordingly.

    If there have been any changes to the production and safety conditions of
a coal mining enterprise, and after being verified, the changed production
and safety conditions are considered no longer to conform to the stipulations
of this Law, the coal production license of the enterprise shall be revoked
by the issuing department with an announcement made accordingly.

    Article 27  Measures for the control of coal production licenses shall be
formulated by the State Council in accordance with this Law.

    The standing committee of the people's congress of provinces, autonomous
regions and municipalities directly under the central government may, in
accordance with this Law and relevant provisions of the State Council,
formulate measures for the control of coal production licenses for
implementing within their respective regions.

    Article 28  The state shall conduct protective exploitation with regard
to those special or scare kinds of coal which bear importance to the national
economy.

    Article 29  The exploitation of coal resources must accord with the coal
mining rules, abide by the rational mining order and reach the specified
recovery rate of coal resources.

    The recovery rates shall be determined by the department of coal
administration under the State Council in the light of different resources
and mining conditions.

    The state encourages coal mining enterprises to do reexploitation and
mine remnants of old pits or extremely poor coal.

    Article 30  Coal mining enterprises shall strengthen the supervision,
examination and management of the quality of coal products. The quality of
coal products shall be classified according to the national or industrial
standards.

    Article 31  Coal production shall be conducted within the approved mining
areas in accordance with the law. No exploitation beyond the approved
boundary or layer shall be allowed.

    In mining operation, it is forbidden to mine protective coal columns
without authorization or adopt dangerous methods such as breaking dikes,
demolition or making tunnels through that may endanger the safety in
production of the neighboring coal mines.

    Article 32  If any activities of coal exploitation cause occupation of
areas of land or subsidence of, or damages to, land surface, the exploiter
shall be responsible for its reclamation and restoration to the useful
status; compensation shall be given if any losses have been made to others.

    Article 33  Closure of mines and scraping of pits shall be handled in
accordance with relevant laws and regulations as well as relevant provisions
of the department of coal administration under the State Council.

    Article 34  The state shall establish a system under which coal mining
enterprises shall accumulate funds for shifting the line of production when
the coal mine comes to its senile stage.

    The state encourages and supports coal mining enterprises to develop
diversified economy.

    Article 35  The state encourages and supports coal mining enterprises and
other enterprises to develop combined production of coal and electricity,
coking, coal chemical industry and coal building materials, etc. through
developing deep and fine processing of coal.

    The state encourages coal mining enterprises to develop coal dressing
processing, comprehensively exploit and utilize seam gas, gangue, coal mire,
bone coal and peat.

    Article 36  The state shall develop and promote coal cleaning technology.

    The state shall take measures to ban coking with local methods. It is
forbidden to newly establish coke ovens of local method; the existing ones
shall be transformed within a specified time limit.

    Article 37  People's governments at and above county level and their
department of coal administration and other relevant departments shall
strengthen the supervision and control over the work of safety in production
of coal mines.

    Article 38  The system of mining bureau director's and mine director's
responsibility shall be adopted for the control of safety in production of
coal mining enterprises.

    Article 39  Mining bureau directors, mine directors and other chief
persons-in-charge of the coal mining enterprises must abide by laws and
regulations concerning safety in mines and safety rules and regulations of
coal industry, strengthen the control over the work of safety in production
of coal mines, implement the responsibility system for safety in production
and adopt effective measures to prevent the occurrence of casualties and other
safety accidents in production.

    Article 40  Coal mining enterprises shall give their staff and workers
counseling and training on safety in production; those having not received
such counseling or training may not go to the operation.

    Staff and workers of coal mining enterprises shall abide by laws and
regulations concerning safety in production, rules and regulations of coal
industry and of the enterprise.

    Article 41  During underground operation in coal mines, in the case of
emergencies which endanger the lives and safety of the workers and cannot be
removed, the person in charge or the safety manager at the operation site
shall promptly organize the workers to evacuate the scene of danger and give
report to relevant person in charge without delay.

    Article 42  The labor union of a coal mining enterprise shall, when
discovering that the management of the enterprise gives a command contrary to
the established rules and compels workers to operate under unsafe conditions,
or finding in the course of production major hidden dangers of accidents
which may endanger lives and safety of the workers, have the right to put
forward proposals for a solution, and the management of the coal mining
enterprise must make a decision without delay. If the management of the
enterprise refuses to take any action, the labor union shall have the right
to give criticism, inform the relevant authorities or file charges.

    Article 43  Coal mining enterprises must provide their staff and workers
with labor protection articles necessary for the guarantee of safety in
production.

    Article 44  Coal mining enterprises must effect accident insurance and
pay the insurance expenses for the staff and workers who conduct underpit
operation.

    Article 45  Equipment, materials, fire products and safety instruments
used by coal mining enterprises must meet the national or industrial
standards.
Chapter IV  Coal Management

    Article 46  Coal mining enterprises having obtained a coal production
license in accordance with the law shall be entitled to sell the coal
produced by the enterprise itself.

    Article 47  For establishing a coal managing enterprise, the following
requirements must be satisfied:

    (1) have a registered capital compatible with the management scale;

    (2) have fixed premises;

    (3) have necessary installations and sites for coal storing;

    (4) have up-to-standard metrological and quality inspection equipment;

    (5) conform to the rational distribution of coal managing enterprises
demanded by the state; and

    (6) other requirements specified by laws or regulations.

    Article 48  For establishing a coal managing enterprise, an application
must be submitted to a department designated by the State Council or by the
people's government of the province, autonomous region or municipality
directly under the central government; the latter shall conduct a
qualification examination in accordance with the requirements specified in
Article 47 of this Law and the scope of authorities at different levels
stipulated by the State Council; those satisfying the requirements shall be
given an approval. Only after having applied for and obtained a business
license from the administrative department for industry and commerce by
presenting the approval document may the applicant engage in coal management.

    Article 49  In coal managing activities, coal managing enterprises shall
abide by the provisions of relevant laws and regulations, improve service
quality and ensure supplying. All illegal managing activities shall be
forbidden.

    Article 50  Intermediate links shall be reduced and irrational
intermediate links shall be liquidated in coal management. It is advocated
that coal mining enterprises with suitable conditions conduct direct sales of
coal.

    Coal users and coal managing enterprises in coal sales territories shall
be entitled to purchase coal directly from coal mining enterprises. In coal
production territories, coal sales and transport service agencies may be
organized to handle selling and transporting business for small and medium-
sized coal mines.

    No administrative departments may violate the state's provisions and
establish intermediate links in the course of coal supply and charge extra
expenses.

    Article 51  Stations, ports and other transportation enterprises engaging
in coal transportation may not involve themselves in coal management and seek
for illicit earnings by taking advantage of the transportation power they
possess.

    Article 52  The administrative department for commodity prices under the
State Council shall, in conjunction with the department of coal
administration and other relevant departments under the State Council,
conduct supervision and control over the market prices of coal.

    Article 53  The quality of coal supplied to users by coal mining
enterprises and coal managing enterprises shall meet the national or
industrial standards with the called grade and demanded price compatible with
the actual quality. Where the user has special quality requirements, the two
parties of supply and demand shall include the requirements in the contract
for purchase and sale of coal.

    Coal mining enterprises and coal managing enterprises may not adulterate
coal or mix up coal of different grades or pass inferior coal off as
quality one.

    Article 54  Coal mining enterprises and coal managing enterprises shall
give compensation in accordance with the law if the quality of coal supplied
to users by them fails to meet the national or industrial standards or fails
to conform to stipulations in the contract, or the called grade or demanded
price is not compatible with the actual quality and that has caused damages
to users.

    Article 55  Coal mining enterprises, coal managing enterprises,
transportation enterprises and coal users shall supply, transport and accept
and unload coal in accordance with laws, relevant provisions of the State
Council or stipulations in contracts.

    Transportation enterprises shall separately load and stack coal they have
accepted for carriage according to different quality of the coal.

    Article 56  The import and export of coal shall be unifiedly managed in
accordance with provisions of the State Council.

    Large-scale coal mining enterprises with suitable conditions may engage in
coal export after licensed by the administrative department for foreign trade
and economic cooperation under the State Council in accordance with the law.

    Article 57  Measures for administration of coal management shall be
formulated by the State Council in accordance with this Law.
Chapter V  Protection of Coal Mining Area

    Article 58  No unit or individual may endanger power, communication,
water sources, transportation or other production facilities in coal mining
areas.

    All units and individuals are forbidden to disrupt order in production
and other work of coal mining areas.

    Article 59  Any unit and individual shall have the right to inform the
relevant authorities of or file charges against acts of stealing or
destroying installations or equipment of coal mining areas or other acts
endangering the safety in coal mining areas.

    Article 60  Without permission of the coal mining enterprise, no unit or
individual may make planting, breeding or earth-gathering or construct any
buildings or structures within the validity period of the right to use land
obtained by the coal mining enterprise in accordance with the law on the land
concerned.

    Article 61  Without permission of the coal mining enterprise, no unit or
individual may occupy the rail line, road, waterway, wharf, power lines or
water-supply pipes for special use of the enterprise.

    Article 62  When there is a need to conduct operation in the mining area
of a coal mine and the operation may endanger the safety in the coal mine,
only after having obtained permission from the coal mining enterprise and the
approval of the department of coal administration and taken proper safety
measures may relevant unit or individual start the operation.

    When there is a need to conduct public engineering or other engineering
within a coal mining area, only after having consulted and reached agreement
with the coal mining enterprise may the relevant unit start the operation.
Chapter VI  Supervision and Inspection

    Article 63  The department of coal administration and other relevant
departments shall, in accordance with the law, conduct supervision and
inspection on coal mining enterprises and coal managing enterprises with
respect to their implementing of coal laws and regulations.

    Article 64  Supervisors and inspectors from the department of coal
administration and other relevant departments shall familiarize themselves
with coal laws and regulations, grasp the specialized technology in the field
of coal, conduct themselves fairly and honestly and enforce the law justly.

    Article 65  When performing supervision and inspection, supervisors and
inspectors from the department of coal administration and other relevant
departments shall have the power to inquire the situation about the
implementation of coal laws and regulations of coal mining enterprises, coal
managing enterprises and users, consult relevant data and enter the field to
make on-the-spot inspection.

    Coal mining enterprises, coal managing enterprises and users shall
provide facilities to the supervisors and inspectors from the department of
coal administration and other relevant departments in performing their duties
of supervision and inspection.

    Article 66  Supervisors and inspectors from the department of coal
administration and other relevant departments shall have the power to order
the coal mining enterprise or coal managing enterprise to correct their acts
violating coal laws or regulations.

    Supervisors and inspectors from the department of coal administration and
other relevant departments shall produce their certifications when performing
supervision and inspection.
Chapter VII  Legal Responsibility

    Article 67  If anyone violates the provisions of Article 22 of this Law
and engages in coal production without a coal production license, the
department of coal administration shall order it to halt the production,
confiscate the illegal earnings and may impose a fine ranging from one to
five times the illegal earnings; if the offender refuses to halt the
production, the local people's government at or above the county level shall
make an order to cut off its power supply.

    Article 68  If anyone violates the provisions of Article 25 of this Law
and transfers or hires out its coal production license, the department of
coal administration shall revoke its coal production license, confiscate the
illegal earnings and impose a fine ranging from one to five times the illegal
earnings.

    Article 69  If anyone violates the provisions of Article 29 of this Law
and mines coal resources without reaching the coal resources recovery rate
stipulated by the department of coal administration under the State Council,
the department of coal administration shall order the offender to make
corrections within a specified time limit; those failing to reach the
specified recovery rate within the specified time limit shall be revoked of
their coal production license.

    Article 70  If anyone violates the provisions of Article 31 of this Law
and mines the protective coal columns or adopts dangerous methods which may
endanger the safety in production of the neighboring coal mine, the
department of labor administration shall, in conduction with the department
of coal administration, order the offender to halt the operation; the
department of coal administration shall confiscate the illegal earnings,
impose a fine ranging from one to five times the illegal earnings and revoke
the coal production license; if a crime is constituted, the judicial organ
shall make an investigation for criminal responsibility in accordance with
the law; if any losses have been caused, the offender shall be responsible
for compensation in accordance with the law.

    Article 71  If anyone violates the provisions of Article 48 of this Law
and engages in coal managing activities without examination and approval,
the department responsible for the examination and approval shall order the
offender to halt the business, confiscate the illegal earnings and may impose
a fine ranging from one to five times the illegal earnings.

    Article 72  If anyone violates the provisions of Article 53 of this Law
and adulterates coal or mixes up coal of different grades or passes inferior
coal as quality one, it shall be ordered to halt the sales with the illegal
earnings confiscated and a fine ranging from one to five times the illegal
earnings imposed and it may be revoked of its coal production license or
disqualified from coal management; if a crime is constituted, the judicial
organ shall make an investigation for criminal responsibility in accordance
with the law.

    Article 73  If anyone violates the provisions of Article 60 of this Law
and, without the permission of the coal mining enterprise, constructs
buildings or structures within the validity period of the right to use land
obtained by the coal mining enterprise in accordance with the law on the
land concerned, the local people's government shall mobilize the offender to
demolish the building or structure; in the case of refusal to demolish it,
the offender shall be ordered to do so.

    Article 74  If anyone violates the provisions of Article 61 of this Law
and, without permission of the coal mining enterprise, occupies rail line,
road, waterway, wharf, power lines or water-supply pipes for special use of
the coal mining enterprise, the local people's government at or above the
county level shall order it to make corrections within a specified time
limit; those failing to make corrections within the specified time limit
shall be compelled to remove; if any losses have been caused, the offender
shall be responsible for compensation in accordance with the law.

    Article 75  If anyone violates the provisions of Article 62 of this Law
and, without obtaining approval or taking proper safety measures, conducts
operation in the mining area of a coal mine that may endanger the safety in
the coal mine, the department of coal administration shall order the offender
to halt the operation and impose a fine up to 50,000 yuan; if any losses have
been caused, the offender shall be responsible for compensation in accordance
with the law.

    Article 76  Anyone committing any of the following acts shall be punished
by the public security organ in accordance with relevant provisions of the
regulations on administrative penalties for public security or, if a crime
is constituted, be investigated for criminal responsibility by the judicial
organ:

    (1) impede the construction of a coal mine and make it impossible for
the construction to go on smoothly;

    (2) intentionally damage the power, communication, water sources,
transportation or other production facilities in coal mining areas;

    (3) disturb the order in a coal mining area and make it impossible for
the production or other work to go on smoothly; or

    (4) refuse or obstruct supervisors or inspectors who are carrying out
their functions according to law.

    Article 77  Those issuing a coal production license to a coal mining
enterprise that fails to satisfy the requirements specified by this Law or
granting approval to an application for establishing a coal managing
enterprise without satisfying the requirements specified by this Law shall be
ordered to make corrections by the competent authorities of higher level or
by the supervisory organ with a disciplinary sanction given to the person in
charge directly responsible and other person directly responsible; if a crime
is constituted, the judicial organ shall make an investigation for criminal
responsibility in accordance with the law.

    Article 78  Any executive of a coal mining enterprise who gives a command
contrary to the established rules and compels workers to operate under unsafe
conditions and thereby causes accidents involving serious casualties shall be
investigated for criminal responsibility by applying mutatis mutandis the
provisions of Article 114 of the Criminal Law.

    Article 79  Any executive of a coal mining enterprise who fails to take
measures to remove the hidden dangers of accidents and thereby causes
accidents involving serious casualties shall be investigated for criminal
responsibility by applying mutatis mutandis the provisions of Article 187 of
the Criminal Law.

    Article 80  Any functionary of the department of coal administration or
other relevant departments who neglects his duty, practices favoritism and
irregularities or abuses his power shall be given a disciplinary sanction;
if the act constitute a crime, the offender shall be investigated for
criminal responsibility by the judicial organ in accordance with the law.
Chapter VIII  Supplementary Provisions

    Article 81  This Law shall enter into force on December 1, 1996.

Appendix: Relevant Provisions of the Criminal Law

    Article 114  If any staff member or worker of a factory, mine, forestry
center, construction enterprise or other enterprise or institution disobeys
management and violates the rules and regulations or forces workers to work
in a hazardous way in violation of the rules and thereby causes a serious
accident involving injury or death and serious consequences, he shall be
sentenced to fixed-term imprisonment of not more than three years or criminal
detention; if the circumstances are especially flagrant, he shall be
sentenced to fixed-term imprisonment of not less than three years and not
more than seven years.

    Article 187  Any state functionary who, because of neglect of duty,
causes public property or the interests of the state and the people to
suffer heavy losses shall be sentenced to fix-term imprisonment of not more
than five years or criminal detention.