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  • GeoTeam Alert: China Coal Mining Accidents Could Impact L & L Energy Operations 0 comments
    May 7, 2014 9:05 AM | about stocks: LLEN

    It has come to the attention of the GeoTeam that two major coal mining accidents recently occurred (on April 7 and 21, 2014) in Qujing, Yunnan, resulting in the deaths of 35 people. Both accidents occurred in the vicinity of the DaPuAn and SuTsong mines that L & L Energy (NASDAQ:LLEN) claims to own, as shown below:

    On April 15, 2014 the Yunnan Provincial Government ordered the suspension of production of 992 mines that have an annual production volume of less than 90,000 tons.

    In the Mine Safety Conference held on April 22, Yunnan Provincial Governor Li Ji Heng explained that there would be a full safety inspection check, and "all mines under an annual production volume of 90,000 tons are shut down for rectification."

    On April 28, 2014 the Yunnan Mine Safety Bureau issued an order to increase safety inspections of coalmines with annual production volume of more than 90,000 tons. Mines found in violation of safety regulations would be ordered to cease production for rectification.

    Following a major accident, safety inspection checks and mine shutdowns in China frequently last for a year or more. This was the case following the November 2011 Shizong Sizhuang mine disaster that led to the 2012 closures of the Hong Xing coal washing facility and the ZoneLin coking plant. Only after May 2013 did the coal production in the area recover.

    Based on this news, the DaPuAn and the SuTsong mines may have been shut down if their annual production reported to the Yunnan government is less than 90,000 tons, or if either mine failed the heightened safety inspections. LLEN's management team, and not GeoInvesting, has the duty to update shareholders regarding the effects of these horrible accidents.

    Below are summaries and links to six news articles related to the two mining accidents, the shutdown order, and the Mine Safety Conference.

    Yunnan Qujing Mining Accident with 22 People Trapped - Media Claims Accident was Concealed for 4 Hours

    2014-04-08 01:58:00

    http://news.qq.com/a/20140408/000526.htm

    • On April 7, water leakage occurred at the Xiahaizi Mine, Dongshan Town, Qilin District, Qujing. 26 people were working at that time; 4 people had reached safety; 22 people were trapped inside the mine; 500 people were gathered by the local government to initiate a rescue operation.
    • Rescue workers are opening up a path into the mine; 22 workers were trapped with no communication.

    Qujing Fuyuan County Housuo Town Hongtutian Mine Gas Explosion - 14 People Trapped

    2014-04-21 08:34:00

    http://news.163.com/14/0421/08/9QBGC2KT00014JB5.html

    • On April 21, at 12:30 AM, a work-related gas explosion occurred at the Hongtutian Mine 121701, Housuo Town, Fuyuan County, Qujing; 56 people were on shift; 42 people had reached safety; 14 people were trapped inside the mine.
    • After an exhaustive rescue, at 8:00 AM, April 21, 13 bodies have been found dead. The last missing person remains unfound.

    Two Mining Accidents of Yunan Qujing: Dead Miners Families Receive 960 Thousand Yuan Compensation

    2014-04-28 17:46:40

    http://www.yn.xinhuanet.com/newscenter/2014-04/28/c_133295952.htm

    • The families of the dead miners received a one-time compensation payment of 960 thousand yuan
    • The two mining accidents resulted in the deaths of 21 people and 14 people, respectively, with 1 person missing.
      • On April 7, water leakage occurred at the Xiahaizi Mine, Dongshan Town, Qilin District, Qujing 22 and people were trapped. Rescuers found the remains of the 21 dead miners. One miner remains missing.
      • On April 21, a gas explosion occurred at the Hongtutian Mine, Housuo Town, Fuyuan County, Qujing; 14 people died.

    All Yunnan Mines Under the Production Volume of 90,000 Tons are Suspended for Rectification

    2014-04-18

    http://www.ynmj.gov.cn/Pages_15_1393.aspx

    • On April 15, the Yunnan Provincial Government ordered that all Yunnan coalmines under the annual production volume of 90,000 tons are suspended for rectification
    • 992 coalmines would be suspended for rectification

    "It's Self-Criticism, Not Speech" Yunnan Provincial Governor Li Ji Heng "Correct" at Mine Safety Conference

    2014-04-26 17:34:05

    http://news.xinhuanet.com/2014-04/26/c_1110426676.htm

    • Following the severe mining accidents, on April 22 the Yunnan Provincial Government called together a Mine Safety Conference
    • Yunnan Provincial Governor Li Ji Heng, in his one hour speech, stated that:"(There will be a) exhaustive safety inspection. Mines under an annual production volume of 90 thousand tons are shut down for rectification. These measures are taken to prevent future accidents. "
    • After the conference, the responsible person for one of the mine-producing counties spoke: " The strictest safety inspection and mine shutdown in the history of Yunnan has begun"

    Yunnan Coal Mine Safety Bureau Taking Hard Measures to Enhance Coal Mine Safety Inspections

    2014-04-28

    http://www.ynmj.gov.cn/Pages_15_1412.aspx

    On April 25, the Yunnan Mine Safety Bureau issued an order to increase safety inspections on coalmines with annual production volume of more than 90,000 ton/year. If coalmines are found to be in violation of "Special Regulations," "Seven Regulations" and other major regulations, they will be ordered to immediately cease production for rectification.

    Disclosure: I am short LLEN.

    Stocks: LLEN
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