China's mines required to pay safety fees from Jan 1

SteelOrbis Shanghai In recent days, China's Ministry of Finance and State Administration of Work Safety jointly published an announcement to the effect that a safety fee system will be enforced in the mining industry as of January 1, 2007. According to the announcement details, the safety fees for iron ore mines are broken down into RMB 4/mt for strip mines and RMB 8/mt for underground mines. Meanwhile, the safety fees for coal mines are RMB 1/mt for strip mines and RMB 2/mt for underground mines. The safety charges imposed by the government on the mining industry are to ensure the necessary indemnifications in case of safety accidents and difficulties in paying compensation. As a result, the costs of iron ore will surely rise for the mines. In the current situation, with supply less than demand, the mines are likely to transfer the additional cost to the steel mills.