Coal mine owners across the nation will be charged higher utilization fees to curb wasteful mining, the Ministry of Finance said yesterday.

The extra charge is part of a series of taxation and financial measures proposed by the ministry to encourage energy conservation, an important part of the government's plans for China's economic expansion.

"We will soon charge resource utilization fees in the whole coal mining sector to achieve our energy-saving goal," Vice-Minister of Finance Zhang Shaochun said at an energy seminar in Beijing yesterday.

The government has already started pilot programs in eight provinces and autonomous regions such as Shanxi and Inner Mongolia. Since November 2006 it has been charging coal mine owners resource utilization fees to improve their awareness of resource savings.

"The pilot programs are successful and we should implement the practice nationwide," said Zhang. But he didn't reveal a time frame the increased charges would be introduced.

With 80 percent of the resource utilization fees left with local financial coffers, the local government has been given increased financial strength to improve the environment and change the livelihoods of miners for the better.

The remaining 20 percent of the fees has been channeled to the coffers of the central government, slated to be used to expand coal exploration.

During an earlier interview with China Daily, Huang Shengchu, president of the China Coal Information Institute, said the government should also increase resource utilization fees in coal mining.

"Coal is of strategic importance to China's economy and the old way of mining was really wasteful," said Huang. "Our institutional mechanism should ensure coal use for many generations to come."

However, the reckless exploitation of resources has led to shocking waste. The State Council Development Research Center has recently cited an example in Shaanxi province, where mines on average extract only 30 percent of the coal in a seam, leaving the other 70 percent underground forever.

"Low resource utilization fees should be blamed for the waste," said Huang. "And our laws and policies should encourage mine owners to dig out all of the resources."

In the past, mine owners were charged with only 1,000 yuan annually per sq km of coal mine. Now, the resource utilization fees in the pilot regions are decided through auctions and have been increased by a big margin.

Zhang said the government's conservation efforts and stricter measures continue to play a major role in maintaining the country's high sufficiency in energy.

(China Daily June 18, 2008)